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LONDON - Gold extended gains above $1,390 an ounce in Europe on Monday as the dollar surrendered early gains against the euro, and as last week's price dip of more than 2 per cent brought physical buyers back to the market.
Concern over the outlook for the eurozone is also lending support to gold, which is often seen as an alternative investment to stocks, bonds and currencies which can become volatile in times of market turbulence.
Gold hit a record high at $1,430.95 an ounce last Tuesday but quickly surrendered gains to end the week down 2.2 per cent.
Spot gold was bid at $1,397.15 an ounce at 1535 GMT, against $1,383.15 late in New York on Friday. U.S. gold futures for December delivery rose $13.10 an ounce to $1,398.00.
"As long as the U.S. dollar remains weak, (the environment) is favourable," said Peter Fertig, a consultant with Quantitative Commodity Research.
The precious metal extended early gains as the euro moved back into positive territory against the dollar, rising 1.0 per cent after five straight sessions of losses.
Weakness in the greenback usually lifts gold, as it raises the metal's appeal as an alternative asset and makes dollar priced commodities cheaper for holders of other currencies.
Sharper risk appetite after upbeat U.S. and Chinese economic data lifted equity markets and industrial commodities like copper, which touched a record high, on Monday.
Concern over the outlook for the eurozone is also lending support to gold, which is often seen as an alternative investment to stocks, bonds and currencies which can become volatile in times of market turbulence.
Gold hit a record high at $1,430.95 an ounce last Tuesday but quickly surrendered gains to end the week down 2.2 per cent.
Spot gold was bid at $1,397.15 an ounce at 1535 GMT, against $1,383.15 late in New York on Friday. U.S. gold futures for December delivery rose $13.10 an ounce to $1,398.00.
"As long as the U.S. dollar remains weak, (the environment) is favourable," said Peter Fertig, a consultant with Quantitative Commodity Research.
The precious metal extended early gains as the euro moved back into positive territory against the dollar, rising 1.0 per cent after five straight sessions of losses.
Weakness in the greenback usually lifts gold, as it raises the metal's appeal as an alternative asset and makes dollar priced commodities cheaper for holders of other currencies.
Sharper risk appetite after upbeat U.S. and Chinese economic data lifted equity markets and industrial commodities like copper, which touched a record high, on Monday.
