Gold rose about 2 percent on Monday as a fall in the dollar against the euro increased the yellow metal's appeal as an alternative asset
Gold rose about 2 percent on Monday as a fall in the dollar against the euro increased the yellow metal's appeal as an alternative asset, but further buying was capped by uncertainty over the global economic outlook.
Investors were mostly on the sidelines ahead of a meeting next weekend of world leaders to discuss precisely what measures they need work out in coming months, analysts said.
Spot gold stood at $747.45 an ounce as of 0325 GMT, up 1.7 percent from a notional close in New York of $734.80 on Friday.
It earlier rose as high as $753.00, a level last marked on Thursday.
China launched a huge stimulus plan on Sunday worth nearly $600 billion, kicking off what could be a round of big spending or interest rate cuts by leading economices to stave off a recession in many countries.
A rally in Asian shares largely reflected hopes that China's spending plan could offset slowing economies in the United States and Europe and eased fears that a global recession would contain demand for gold.
The euro rose 1.3 percent to $1.2884, extending gains after poor U.S. jobs data late last week.
Another bright spot was a recovery in oil prices, which often moves in the same direction as gold.
U.S. crude oil futures rallied more than $3 to above $64 a barrel, fuelled by top exporter Saudi Arabia's plans to cut December supplies to Asia.
But buying was not aggressive enough to push gold above $760 an ounce, analysts said.
"It looks like gold is being lifted by the same type of temporary optimism we saw on November 4 and 5," Kaname Gokon, deputy general manager at Okato Shoji Co.
Gold rose as high as $768 last week as investors moved to commodities and stocks, relieved that the U.S. presidential election on November 4 had gone smoothly.
"But uncertainty still hangs over us going forward," Gokon said, adding that gold could test $700 if it breaks below $720.
COMEX gold futures rallied in Asia after rising $2 in New York on Friday. The most active December contract was trading at $747.6 per ounce, up 1.8 percent from the New York settlement on Friday.
The benchmark October contract on the Tokyo Commodity Exchange rose 65 yen per gram to 2,392 yen.
Spot platinum rose to $865 an ounce, up 3 percent from $839.50 in New York.
Silver stood at $10.21 an ounce, up from $9.94 in New York. But palladium fell to $221 an ounce, down 1.8 percent from $225.