Forexpros – Gold futures were up for a second day on Monday, climbing to a three-week high as investors await further developments over a plan to resolve the euro zone’s debt crisis, while strong physical demand in Asia also lent support.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,694.75 a troy ounce during late Asian trade, gaining 0.7%.
It earlier rose by as much as 0.8% to trade at USD1,696.05 a troy ounce, the highest price since September 23.
At the conclusion of the Group of 20 summit in Paris on Saturday, world financial leaders urged policy makers in the euro zone to deal “decisively” with the region’s ongoing debt crisis.
European leaders were expected to complete the rescue plan at a summit on October 23, in time to present to a meeting of G-20 leaders early next month.
Investors are closely watching for a decision on a new Greek bailout, one of the plan’s key pillars.
European Union Monetary Affairs Commissioner Olli Rehn said Saturday that he expects euro zone leaders on October 23 to “decide on the key principles and parameters” of the new Greek bailout, but that “technical finalization” of the program will take place in the following weeks.
The news boosted the euro to a four-week high against the U.S. dollar, while the dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, was down 0.2% to trade at a four-week low of 76.72.
Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, strong physical demand for the precious metal in Asia supported prices. In top buyer India, consumers continued to increase purchases of bullion ahead of the gold-buying wedding and festival season due to start in late October.
Swiss lender UBS said in a report Friday that seasonal buying ahead of the Diwali festival of lights in India on October 26 should underpin gold prices in the near-term.
Elsewhere on the Comex, silver for December delivery rose 0.91% to trade at USD32.47 a troy ounce, while copper for December delivery advanced 0.95% to trade at a three-week high of USD3.441 a pound.
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