LONDON: Gold rose to its highest level in nearly two weeks on Monday, shrugging off the dollar’s multi-year high after an interest-rate cut in Beijing lifted demand in China, the world’s second largest gold market.

Weakness in Chinese manufacturing, aggravated by high real borrowing costs and weak demand, appears to have driven the central bank to accelerate the pace of monetary easing.

“Anything that helps stimulate consumer spending is gold favourable because there are more chances of higher purchases of consumer jewellery and gold bars,” Mitsubishi Corp strategist Jonathan Butler said.

Spot gold rose to its highest level since Feb. 17 at $1,223.20 an ounce but had eased to $1,217.90 by 1311 GMT, up 0.4 per cent. It fell 5.5 per cent in February in its biggest monthly loss since September on expectations of an early US rate increase, but was up almost 3 per cent for the year.

The dollar edged 0.1 per cent lower against a basket of leading currencies, but remained close to an earlier 11-year high, helped by the Chinese rate cut.

“We do not rule out another 25 bps rate cut alongside further RRR (reserve requirement ratio) easing in the next 3-6 months if oil prices stabilise and food inflation remains under wraps,” Mizuho Bank said in a note.

The next focus for the market is Friday’s US non-farm payrolls data and next week’s launch of outright money-printing by the European Central Bank.

Comments last week from Federal Reserve officials that the central bank might end its near zero interest rate policy sooner than some expected were pushed into the background by lower than expected US growth data.

Premiums for physical gold at the Shanghai Gold Exchange stayed firm at around $4-$5 an ounce over the global spot benchmark on Monday.

China’s gold imports should rise this year after falling to 813.13 tonnes in 2014 from record highs above 1,150 tonnes a year earlier, said Howie Lee, an investment analyst at Phillip Futures in Singapore.

Top buyer India will introduce gold deposit accounts to utilise the 20,000 tonnes available within the country and launch a sovereign gold bond, but it kept the import duty at a record 10 per cent in a setback for jewellers.

Spot silver was up 0.1 per cent at $16.64 an ounce.

Palladium was up 0.3 per cent to $817.75 an ounce and platinum was up 0.6 per cent at $1,190.70 an ounce.