Investing.com - Gold prices rose sharply during European morning trade on Monday, hitting the strongest level in around two months as the U.S. dollar tumbled amid uncertainty around the economic policies of new U.S. President Donald Trump.
Gold for February delivery on the Comex division of the New York Mercantile Exchange touched a session high of $1,219.40 a troy ounce, a level not seen since November 22.
It was last at $1,214.50 by 3:10AM ET (08:10GMT), up almost $10.00, or 0.8%.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.5% at 100.25 in early trade, after slumping to a seven-week low of 100.17 earlier.
The dollar sold off after President Trump struck a protectionist tone in his inauguration speech on Friday, disappointing investors who hoped to hear further details on his promises of tax cuts and other stimulus.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Investors will get back to the business of watching economic data for fresh indications on the health of the economy in the week ahead, with Friday's advanced reading for U.S. growth in the spotlight.
Besides the GDP report, this week's calendar also features U.S. data on existing home sales on Tuesday, initial jobless claims and new home sales on Thursday, followed by durable goods orders and revised consumer sentiment on Friday.
A recent string of solid data reinforced the view that the U.S. economy is sufficiently robust to warrant higher interest rates in the months ahead.
The Federal Reserve indicated last month that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot.
However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com's Fed Rate Monitor Tool.
A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar.
Also on the Comex, silver futures for March delivery tacked on 11.0 cents, or about 0.7%, at $17.14 a troy ounce during morning hours in London.
Meanwhile, platinum rallied 1% to $985.75, while palladium added 0.4% to $791.40 an ounce, the strongest level since May 2015.
Elsewhere in metals trading, copper futures rose 2.0 cents, or about 0.8%, to $2.645 a pound.