Gold hits 2-week high on strong haven demand

Gold prices rose in European trade on Monday, extending profit for the second straight day and jumping to a two-week high, on increasing safe-haven demand, and hopes over Chinese actual demand ahead of the next New Lunar Year, however, these gains are capped as the US dollar rose against a basket of currencies.

Gold prices gained more than 0.3% to $1,562.77 (highest since Jan.10), after opening at $1,557.48, with a session-low of $1,556.37.

The yellow metal gained 0.3% on Friday, marking its second daily gain in three days, on strong demand levels.

During the past week, gold prices lost 0.3%, to post the first weekly loss in a month and a half, as investors focused on buying the US dollar against a basket of major currencies.

During the weekend, geopolitical concerns in the Middle East mounted again after a missile attack in Yemen, which boosted the precious metal's safe haven appeal.

In the world's largest consumer of gold, China, actual demand for gold increased, ahead of the New Lunar Year.

The dollar index rose by 0.1% today, extending its gains for the third straight day, jumping to a 4-week high of 97.73 points, thanks to risks around the US economy receding, especially regarding global trade tensions, and strong retail sales and housing data, which have spurred confidence in the US economic growth path during Q4 2019.

Gold holdings at SPDR Gold Trust Fund, rose by 19.33 metric tonnes on Friday, the largest daily increase since June 21, 2019, with a total of 898.82 mt (the highest since Nov. 8).