Gold prices rose on Monday, buoyed by a weaker dollar, as investors looked ahead to congressional testimony by the nominee to chair the US Federal Reserve and a meeting between US President Donald Trump and Senate Republicans on tax reform. Spot gold was up 0.5 percent at $1,294.44 an ounce by 1:36 p.m. EST (1836 GMT), after hitting $1,299.13, its highest since Oct. 16. US gold futures for December delivery settled up $7.10, or 0.6 percent, at $1,294.40 per ounce.
"We've seen a fairly firm recovery underpinned by a weaker dollar and some data readings from the US and elsewhere that called into question the sustainability of growth," said Mitsubishi analyst Jon Butler. Last week, US PMI and capital goods data missed expectations, pressuring the dollar which slid to its weakest in two months.
A weaker dollar can stimulate demand for gold, making the precious metal cheaper for holders of other currencies. Also weighing on the dollar were the minutes from the latest Federal Reserve meeting, showing policymakers were concerned about low inflation and could be wary of raising interest rates rapidly. "It's fairly safe to say markets are not all that convinced that we'll get as many rate hikes as some people are speculating," said Bart Melek, head of commodity strategy at TD Securities in Toronto.
On the technical side, gold broke through fibonacci resistance at $1,295.40 and momentum indicators suggested that gold prices would continue to rise, ScotiaMocatta analysts said in a note. Gold options on the December contract were set to expire on Monday. Among other precious metal prices, silver was up 0.5 percent at $17.06 an ounce, platinum advanced 0.6 percent at $945.65 and palladium was up 0.9 percent at $1,006.25.
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