Gold prices held steady on Monday, near a seven-month peak scaled in previous session, on hopes the US Federal Reserve will keep interest rates unchanged during its two-day policy meeting later in the week.
"Gold is having a very positive macro stance in the sense the US Fed is going to be more accommodative along with the European Central Bank, which is seeing downside risks to the economy," said Edward Moya, market analyst at OANDA.
The Fed raised interest rates four times last year and has signalled it will probably lift borrowing costs twice in 2019, though some central bank officials have said they will be patient in raising rates.
Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.
Meanwhile, Asian stocks advanced on Monday as Wall Street rallied after a deal was announced to reopen the US government following a prolonged shutdown that had shaken investor sentiment.
The shutdown had added to the worries of investors who were already concerned over slowing global growth, signs of stress in corporate earnings and a still unresolved Sino-US trade war.
"While the shutdown concerns are alleviated now, the long- term play is really uncertain," Moya said.
Spot gold rose 1.8 per cent on per cent, notching up its best one-day percentage gain since Oct. 11, hitting its highest since June 14, 2018. The metal also broke above the psychological level of $1,300 after failing multiple times due to strong technical resistance.
"The Fed meeting this week could be instrumental in triggering more dollar selling as well, as could positive Brexit developments, which is why we would stay long gold going into the week."
Among other metals, palladium was steady at $1,361.50. Its Price had hit a record high of $1,434.50 on Jan. 17.
Silver was firm at $15.76 per ounce, while platinum rose 0.3 per cent to $816.