Gold prices climbed in Europe on Monday as the euro firmed to a three-month high against the dollar and prices of other commodities like crude oil jumped on the back of rising equity markets.
Spot gold rose as high as $1,190.40 an ounce and was bid at $1,185.35 an ounce at 1343 GMT (9:43 a.m. EDT), against $1,181.50 late in New York on Friday. U.S. gold futures for August delivery rose $4.10 to $1,188.00.
Simon Weeks, head of precious metals at the Bank of Nova Scotia, said gold had risen above the 100-day moving average at $1,183 an ounce on the back of currency moves and rising oil prices. Next resistance is $1,200-$1,205, he said.
He added that gold remained vulnerable to further losses, especially if equity markets continued to climb. People will liquidate safe havens and put risk on, he said.
Gold has managed to arrest a slide that last week took it to a three-month low of $1,156.90 an ounce. Investment in the precious metal has tailed off over the summer months as assets seen as higher risk like equities firmed at gold's expense.
However, it is showing signs of re-establishing its usual inverse link with the dollar, and is benefiting from gains in other commodities. Gold is often bought as part of a commodity basket by investors.
The wider financial markets are benefiting from better appetite for risk. Equities made strong gains on Monday in Europe, with the FTSEurofirst 300 rising 2.3 percent to three-month highs.
Wall Street opened about 1 percent higher on Monday, building on last month's solid gains, as investors focused on encouraging corporate results, including strong bank earnings out of Europe.
Other assets seen as higher risk also rose, with oil prices climbing nearly 2 percent to above $80 on Monday as macroeconomic indicators in top energy consumers the United States and China showed slower but sustained growth.
The dollar index hit a three-month low on Monday, while the euro extended gains against the U.S. unit to above an important technical level that analysts say suggests the currency's rally is gaining momentum.
Lower prices meanwhile encouraged higher gold demand from key bullion-consuming centers China, India and the Middle East.
Indian gold buying rose on Monday afternoon as traders took advantage of the strong rupee, which made the dollar-quoted asset cheaper, to complete deals, traders said.
Meanwhile imports into major gold consumer Turkey rose to 19.9 tonnes in July, the Istanbul Gold Exchange said, from 14.3 tonnes a year ago and 300 kilograms in June.
However, the world's largest bullion exchange-traded fund, the SPDR Gold Trust, saw its biggest outflow in a year last month, with holdings down more than 38 tonnes in July to 1,282.3 tonnes.
The World Gold Council said the International Monetary Fund sold 17.4 tonnes of gold in June as part of a planned programme of bullion sales. That leaves 120.2 tonnes of gold still to be sold under the programme.
Silver was at $18.36 an ounce versus $17.96, while its ratio to gold -- or how many ounces of silver are needed to buy an ounce of gold -- hit its lowest since mid-May at 65.0.
Platinum was at $1,587 an ounce against $1,566.55, while palladium was at $501 against $491. Palladium reached a fresh 10-week high at $502 an ounce in earlier trade.
Both metals saw significant interest on the New York futures market last week, according to the Commodity Futures Exchange Commission's Commitment of Traders report.
(Editing by Sue Thomas)