London: Gold prices rose above $1,120 an ounce to their highest in two weeks as the euro extended the previous session's gains versus the dollar, prompting fresh investment flows into the precious metal.
"Investment demand from the United States and a lack of selling out of Asia are pushing gold up," said Standard Bank analyst Walter de Wet, adding that a fall in net long positions in New York gold futures suggested gold had room to rise.
"For most of these commodities, speculative length has declined substantially, so there is room for more money to flow in," he said.
The euro firmed against the dollar Wednesday, extending the previous session's gains, as traders covered short positions in the single European currency as the flow of news about Greece's fiscal problems stalled for the moment.
Gold rose late last week on fears over the outlook for debt-laden Greece, which knocked the euro sharply lower versus the dollar. It broke its usual inverse correlation with the dollar as both benefited from risk aversion.
Gold is on course for a 3.8 per cent rise in February, its first monthly increase since November.
Would you invest in gold now? Compared with other types of investments, is gold a safe option?
