Gold. Picture: REUTERS
Gold. Picture: REUTERS

Bengaluru — Gold rose on Monday as investors flocked to safe-haven assets on concerns over a possible recession in the US that dented the dollar and added to an increasingly bleak picture on global growth.

Spot gold gained 0.3% to $1,316.58 an ounce at 11.15am GMT. The metal posted its third consecutive weekly gain last week with a rise of about 1%.

US gold futures were up 0.3% at $1,316.70.

Equity markets, meanwhile, hit a 12-day low after global economic worries were exacerbated by an inversion in the US bond yield curve on Friday, stoking fears of a possible recession in the world's largest economy and boosting demand for assets such as gold and the yen while denting the dollar.

"The [gold] market has continued to rise in response to the continued worries that we have seen creeping in the market about recessionary risks," said Saxo Bank analyst Ole Hansen.

"But at this stage, it is not a sprint, it is a grind," Hansen added, reasoning that gold's moves higher lacked conviction despite weakness in equities, bond yields and the dollar.

US manufacturing activity cooled unexpectedly in March while businesses across the eurozone performed much worse than expected, fanning economic growth concerns.

Lower bond yields reduce the opportunity cost of holding nonyielding gold and weigh on the dollar, making bullion cheaper for nonUS investors.

Gold has gained more than 13% since touching more than one-and-a-half-year lows last August, mainly driven by a dovish US Federal Reserve and global growth concerns.

Investors were also keeping a close eye on developments surrounding Brexit, with British Prime Minister Theresa May under pressure to give a date for leaving office as the price to bring rebel legislators in her party behind her twice-defeated EU divorce treaty.

"Speculative financial investors are also likely to continue betting on rising gold prices having already stepped up their net long positions ... this further paves the way for gold as it continues on its upswing," Commerzbank analysts said.

Speculators raised their net long position by 15,971 contracts to 57,746 in Comex gold in the week to March 19, data showed on Friday.

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose about 1% in the previous week.

Among other precious metals, palladium slipped 1.5% to $1,540.17 an ounce, silver gained 0.6% to $15.50 and platinum was up 0.7% at $850.