LONDON (Commodity Online) : Gold climbed further in European trade Monday mainly on decline in dollar and on reports of Dubai getting financial aid to avert a debt default.
Spot gold was seen trading at $1222.58 an ounce at 4.00 pm Indian time compared with Friday’s close of $1,113.85 in New York.
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U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange rose $3.70 to $1,123.60 an ounce.
Prices rose 0.8 percent in Europe as news that Dubai had averted a debt default sharpened appetite for risk, pressuring the dollar and boosting higher-yielding currencies such as the euro.
The news lifted assets perceived as higher risk, such as stocks and higher-yielding currencies, and pressured the dollar.
The euro rose against the dollar on Monday after Dubai's announcement. Weakness in the U.S. unit boosts gold's appeal as an alternative asset, and makes dollar-priced commodities cheaper for holders of other currencies.
Holdings of the world's largest gold-backed exchange-traded fund were unchanged on Friday but declined 13.7 tonnes week-on-week, reflecting a 4-percent fall in the price of spot gold in the same period.
London's ETF Securities said holdings of its gold-backed exchange-traded products declined just over 38,000 ounces or 0.5 percent last week.
Meanwhile, world’s largest gold consumer India’s gold collection under exchange-traded funds rose 32.9 percent on year to 7.4 tonnes in November.
The most-traded February contract was trading 0.09 percent higher at 16,980 at 4.00 p.m., off its intra-day high of 17,116 rupees.
The contract ended with more than 12 percent gains in November, with highest number of record highs in a single month.
Though gold collections under ETFs are growing, they remain miniscule against India's imports of about 700 tonnes annually.
Gold ETFs , instruments that can be traded like shares and are backed by physical gold holdings -- are more than two years old and the segment may get crowded with some other funds planning to enter.
