Gold has climbed above the $1,400 per ounce mark for the first time since June, re-entering a bull market as disappointing US data and worries over Syria push investors into safe havens.
The price of the precious metal has risen more than 20% since its $1,180 intraday low on 28 June to trade at $1,417. A 20% rise or more in an asset price is the generally accepted definition of a bull market.
The precious metal's surge comes despite the Federal Reserve's suggestion it will go ahead with QE tapering as planned, as recent US data has come in below expectations.
Industrial production and new home sales last week and durable goods orders on Monday suggest the recovery in the US is moving more slowly than expected, which economists say could persuade the Fed to postpone tapering.
Nicholas Brooks, head of research and investment strategy at ETF Securities, said demand from physical gold buyers has increased, particularly in Asia, suggesting the price can continue appreciating.
"This demand surge, combined with subdued recycling and diminished mining productivity, should provide a solid foundation for continued price appreciation," he said.
According to reports, India is considering asking gold traders to provide proof of payment for their jewellery exports, which could further tighten gold supplies in the world's top bullion buyer and push the price higher.
Despite the recent spike in the spot price, gold still remains far off last year's highs, when it was trading near the $1,800 mark.
Meanwhile, the dollar, which tends to trade inversely from gold, has fallen against the euro and the Japanese yen, as investors seek safety amid fears of US military action in Syria. It is currently trading at 97.5 yen to the dollar.
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