Central bank demand propels safe-haven gold to record peak

Gold prices hit a record high on Monday for a seventh straight session, fuelled by central bank purchases and geopolitical tensions, while strong economic data failed to dull bullion's allure.

Spot gold firmed 0.3 per cent to $2,336.39 per ounce, as of 13:45 p.m. ET (1745 GMT), after hitting a record high of $2,353.79 earlier in the session.

U.S. gold futures settled 0.2 per cent higher at $2,351.

China's central bank added 160,000 troy ounces of gold to its reserves in March, it said. Turkey, India, Kazakhstan and some eastern European countries have also been buying gold this year.

"The market is pricing rate cuts by June despite strong economic data. But, if we continue to see strong data, which indicates that Federal Reserve is in no hurry to cut rates, then gold will not be able to sustain the gains," said Bart Melek, head of commodity strategies at TD Securities.

"Central bank buying and geopolitical tensions are other supportive elements," Melek added.

Traders are pricing in around a 52 per cent chance of a first 25 basis point cut in U.S. rates in June, CME Group data showed. However, data showed on Friday that U.S. job growth blew past expectations in March, calling into question the timing of rate cuts. [USD/] [US/]

Lower interest rates reduce the opportunity cost of holding bullion.

COMEX gold speculators raised their net long positions by 20,493 contracts to 178,213 in the week ended April 2, data showed on Friday.

Spot silver was up 1 per cent at $27.76, its highest in nearly three years.

India's silver imports hit a record high in February as lower duties encouraged large purchases from the United Arab Emirates, officials told Reuters.

Platinum rose 3.9 per cent to $963.60 and palladium firmed 3.8 per cent at $1,040.82.

The anticipation of platinum group metals starting to catch up with gold is driving prices higher, said Daniel Pavilonis, senior market strategist at RJO Futures.

"The precious metals sector as a whole is starting to benefit from gold being so expensive now."