Gold prices rose for the fifth straight day on Monday to a three-week high in Indian markets in sharp contrast to the Sensex and Nifty that opened on a negative note and drifted further in the wake of weak global cues and disappointing factory output data for April.
In tandem, gold prices touched a four-week high in Singapore market to $1,281.96 an ounce, beating $1,284.20 an ounce reached on May 16.
"Gold has been up and $1,300 should be an immediate target at least for the coming week, with $1,240 being the support level," Reuters quoted Mark To, head of research at Hong Kong's Wing Fung Financial Group, as saying.
A fall in Asian stock markets on account of cautionary approach expected to be adopted by central banks of major economies this week and worries of Brexit contributed to the spike in gold prices, according to the agency.
The U.S. Federal Reserve, Bank of England, Swiss National Bank and Bank of Japan are set to meet this week and are likely to keep interest rates unchanged in the context of weak global economic scenario.
On Monday, gold prices gained Rs. 160 to close at Rs. 29,660 per 10 gm while silver prices declined marginally to end at Rs. 41,000 per kg.
Silver had plunged below the Rs. 40,000-mark on May 20 but since then has been gaining steadily.
The firm trend prevailing in the global markets along with strong buying by jewellers contributed to gold prices gaining on Monday, according to a PTI report.
However, prices of the yellow metal could fall by Wednesday and an ambivalent stance of the US Federal Reserve could result in prices rising further, according to an analyst.
"Gold could push a little higher during the early part of the week, but we expect it to hit some turbulence by Wednesday, the day of the Fed meeting," Reuters quoted from a note by INTL FCStone analyst Edward Meir.
"That is when we expect the bank to signal that it is warming up to a rate increase for July," he added.