Gold was trading at 7-week highs Monday morning, touching $1,170/oz on London spot markets for the first time since August 24, as gold continues to benefit from a weak US dollar and increased expectation of a delayed US rate hike.
The dollar came under pressure Friday and continued to fall Monday, as minutes of the US Federal Reserve's September meeting showed a divided committee, less likely to raise interest rates this year on higher risks to US economic growth.
Economic data coming from the US recently has disappointed, putting the dollar under pressure and the likeliness of an interest rate hike this year -- which would hurt demand for non-yielding assets such as gold -- less likely.
The London Bullion Market Association Gold Price settled at $1,164.20/oz Monday morning, up $12.65/oz on the previous session.
The LBMA price has gained 4.5% since the end of September.
Barclays, which expects a Fed hike in March 2016, said in a note Monday that gold "should continue to trade mainly around US economic data."
This would be supportive for gold "if the market starts to price out December hike expectations," said Barclays.
Meanwhile net speculative positions continue to move to the long side, according to COMEX data Monday, which shows managed money net length has moved back above 40,000 mt to its highest level in four months.
"If [gold] were able to exceed its August high, we could see technical follow-up buying," said Commerzbank Monday.
"What is more, the technically important 200-day moving average is now in reach," Commerzbank added.
However, emerging market physical demand remains weak.
India's physical premium to the London spot market was heard at a $7/oz discount Monday, whilst China is still yet to pick up from the seven-day holiday last week.
Premiums in China were heard at $3.5-$4.5/oz Monday.
Imports of gold bars into India were reported down 71% in September last week at 41.7 mt, custom data showed.
Turkey's gold imports were 1.45 mt in September, down 88% from 11.68 mt in August, data from Borsa Istanbul showed.
