Gold rose for the first time in three days after the dollar weakened against the euro, boosting the appeal of the precious metal as an alternative asset.
The dollar fell on speculation that growth in the US, the world's largest economy, will slow further, backing the case for the Federal Reserve to cut interest rates. Economists forecast the Institute for Supply Management's manufacturing index will drop to the lowest level since October 2001.
"We anticipate gold to move higher at some point" as "official efforts to reflate the economy have only just begun," Greg Canavan, analyst at Fat Prophets Management.
Bullion for immediate delivery traded 0.7% higher at $US729.41 an ounce in Singapore trade after dropping 1.4% last week. Silver for immediate delivery added 0.9% to $US9.94 an ounce.
The Institute for Supply Management's factory index declined to 41.5 in October from 43.5 the previous month, according to economists surveyed by Bloomberg News. A reading of less than 50 signals contraction.
The dollar weakened versus 11 of the 16 most-active currencies as a Labor Department report on November 7 may show payrolls contracted for a 10th straight month in October.
The greenback declined against the euro for the first time in three days. It fell to $US1.2792 per euro from $US1.2726 late in New York on October 31.
Futures on the Chicago Board of Trade indicate a 55% probability the Fed will reduce the target rate to 0.5% at its December 16 meeting. The odds a week ago were zero. The rest of the bets are for a quarter-percentage point reduction.
December-delivery gold rose 1.8% to $US731 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange. Gold for December delivery in Shanghai gained 0.6% to 160.40 yuan a gram ($US729 an ounce).
