Investing.com - Gold prices resumed their recent rally on Monday, rising above the $1,400 level as prospects for easier monetary policy from the Federal Reserve and other central banks boosted inflows into the precious metal.
Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, were up 0.5% at $1,406.55 per ounce by 12:38 AM ET (04:38 GMT). The contract gained 4.1% last week.
Gold has been gaining since the Fed indicated at its meeting last week that it could cut interest rates, possibly as soon as next month, to offset the effects of slowing global growth as a result of trade tensions and subdued inflation. The European Central Bank and the Bank of England also sounded more dovish last week.
Lower interest rates make safe-haven assets such as gold, which does not yield interest, more attractive while weighing on the U.S. dollar.
Heightened geopolitical tensions in the Middle East also boosted safe haven demand for the yellow metal. Late last week, Iran shot down an American surveillance drone and accused the U.S. of incursion and spying over Iranian airspace, while the Pentagon said that the aircraft was in international airspace when it was targeted.
The administration most recently accused Iran of last week's attacks on oil tankers in the Persian Gulf, which Tehran strongly denied involvement in the explosion.
Investors tend to seek out gold, seen as a safe haven asset in times of political or economic uncertainty.