Gold gains on US rate cut bets

Gold prices climbed on Monday as China's central bank resumed gold purchases after a six-month pause, while expectations for an interest rate cut at the Federal Reserve's meeting next week strengthened.

Spot gold gained 0.9 per cent to $2,655.81 per ounce, as of 1241 GMT. US gold futures added 0.7 per cent to $2,678.20.

"Falling US interest rates and ongoing solid demand from central banks are supporting the gold price. (It) Was definitely good to see again purchases by the Chinese central bank last month, but other central banks have been also buying large quantities," said UBS analyst Giovanni Staunovo.

Zero-yielding bullion thrives in a low interest rate environment and is considered a hedge against political and economic uncertainty.

Adding to political uncertainty in the Middle East, Syrian rebels seized Damascus, forcing President Bashar al-Assad to flee to Russia.

Spot silver added 2.2% to $31.65 per ounce, platinum rose 1.8% to $946.35 and palladium jumped 2.7% to $981.83.