For the first time since August last year, gold breached the $1,300 an ounce barrier, as concerns of a softer dollar, downward revision in global growth forecast for 2015 and and ECB stimulus led to a spike in demand for the yellow metal.

Gold bars and Swiss Franc

A weaker dollar makes gold more affordable for holders of other currencies.

The IMF, in its latest World Economic Outlook report, reduced its global economic forecast by 0.3 percentage points for this year and next, projecting a 3.5 percent growth in 2015.

Last week's Swiss National Bank's move to remove the peg against the Euro, strengthened the Franc, and with the interest rate moving into the negative territory (-0.75%), gold makes a successful return as the hedge against most economic scenarios.

Singapore gold prices, which set the price trend in India, climbed 0.6% to $1,303.63 an ounce while silver hit a 1.9% hike, to trade at $18.33 an ounce, highest since September 2014.

In India too, gold prices increased for a fifth-straight day, gaining ₹320, to trade at ₹28,500 per ten grams, driven also by a wedding season demand, on top of the global economic cues.

Industrial units and coin makers increased their demand for silver, helping boost prices by ₹950, to ₹40,150 per kg, breaching the ₹40,000 mark for the first time in four months.

Speculation is rife that central banks would want to counter a slowing global growth by inducing new stimulus measures, which could also see demand increasing for the yellow metal.

Gold has seen prioces firm up by ₹1,180 in five straight sessions, read EconomicTimes.

Sovereign, consisting of eight-gram pieces in limited deals, traded at ₹24,000 per piece.