Gold prices rose on Monday to their highest level in nearly two weeks, as demand was boosted by a weaker dollar and the U.S. Federal Reserve's new policy framework suggested that interest rates would remain low for some time.
Spot gold was up 0.4% at $1,971.68 per ounce by 0043 GMT, after hitting its highest since Aug. 19 at $1,976 in early Asian trade. However, gold is down nearly 0.2% so far this month.
U.S. gold futures rose 0.4% to $1,982.50.
Last week, Fed Chairman Jerome Powell said the central bank would adopt an average inflation target, meaning rates are likely to stay low for longer.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
The dollar index fell 0.2% and was on track for its fourth consecutive monthly decline.
Asian shares notched a fresh two-year high as investors wagered monetary and fiscal policies globally would stay super stimulatory for a protracted period.
Global coronavirus cases surged past 25 million on Sunday, according to a Reuters tally, as India marked a worldwide record for daily new cases in the COVID-19 pandemic.
China's factory activity expanded at a slightly slower pace in August.
Japan's factory output rose for a second straight month in July, while retail sales fell for a fifth straight month.
Speculators reduced their bullish positions in COMEX gold and raised them in silver contracts in the week to Aug. 25.
On the physical side, dealers in India offered the highest discounts on gold in five months last week as a dip in domestic prices failed to revive demand.