Gold futures approached $1,300 an ounce to post the longest rally in 11 months on speculation that the European Central Bank will boost economic stimulus, increasing demand for the precious metal as a haven.

Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, last week rose 3.3 percent, the most since May 2010. Futures posted the biggest weekly gain in 18 months after the Swiss central bank unexpectedly abandoned its currency peg against the euro. The International Monetary Fund on Monday made the steepest cut to its global-growth outlook in three years.

The metal on Tuesday climbed to a 20-week high amid speculation that stagnant foreign economies will prompt the Federal Reserve to wait longer before raising interest rates. ECB President Mario Draghi will probably announce a 550 billion-euro ($638 billion) program of quantitative easing this week, economists said in a Bloomberg survey.

Gold futures for February delivery climbed 1.4 percent to settle at $1,294.20 at 1:39 p.m. on the Comex in New York. Earlier, the price touched $1,297.20, the highest for a most-active contract since Aug. 28. The metal advanced for a seventh straight session, the longest rally since Feb. 18.

Source : Bloomberg