Gold prices rose on Monday, as the U.S. dollar and Treasury yields retreated on weaker economic readings, casting doubts over whether the Federal Reserve may stick to its hawkish policy outlook.
"Gold has probably found a home around 1900," said Edward Moya, senior market analyst at OANDA.
"There's some positioning happening here ... the market last week seemed to be slowly pricing in more Fed rate hikes, but data going forward might suggest that might not be happening, we could get really get one more rate hike."
Also propping up safe-haven gold, the spread between the 2-year and 10-year U.S. Treasury note yields hit the widest since 1981, reflecting concerns that an extended Fed rate hiking cycle will tip the United States into recession.
Futures markets had reflected rate cuts at the Fed's September meeting as recently as May, and are now projecting that the first cuts will come in January.
Lower interest rates tend to lift gold as it reduces the opportunity cost of holding the non-yielding asset.
Gold also got a fillip from a dip in the dollar after data showed U.S. manufacturing slumped further in June.
Carlo Alberto De Casa, external analyst at Kinesis Money, said that considering gold prices could trade in the $1,900-$1,930 range before the release of the minutes of the Fed's June 13-14 meeting that could contain further clues on policy.
Among other precious metals, spot silver gained 0.8% to $22.93 per ounce, while platinum rose 0.9% to $908.90. Palladium climbed 0.7% to $1,236.31.