Gold prices rebound on dollar weakness

Gold prices rose more than 1 per cent on Monday, helped by a weaker dollar and safe-haven demand after Moody's downgraded

the US government's credit rating amid lingering

trade concerns, reports Reuters.

Spot gold gained 1.1 per cent to $3,239.23 an ounce by 1236 GMT, reversing the previous session's losses. US gold futures gained 1.7 per cent to $3,242.60.

"The main supporting factor for gold today is the downgrade of American debt by Moody's," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

"The dollar is also weakening across the board, with bond yields rising because government debt is being sold, so it's a bit of a risk off tone in the market."

Moody's cut the United States' top sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about its growing $36 trillion debt pile.

The dollar slipped 0.8 per cent, making greenback-priced gold cheaper for overseas buyers.