London: Gold on Monday rose on speculation the biggest drop in a year spurred more physical purchases before China's Lunar New Year holiday.
Gold added 0.7 percent to USD 1,243.04 an ounce and silver advanced 1.9 percent to USD 17.04 an ounce.
Consumers in China, the largest gold buyer, traditionally purchase bullion ahead of the holiday, which starts next week.
Volumes traded on the Shanghai Gold Exchange were the highest in a month last week. Silver rose as much as 2.1 percent on Monday.
Holdings in gold-backed funds rose to the highest since October on February 6. Assets increased from the lowest since 2009 last month, partly as stimulus in Europe and China and Greek talks to end austerity measures boosted haven demand. Prices dropped 2.4 percent on February. 6 after data showed the US Added more jobs than forecast in January.
