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The precious metal ended at 1,264.
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50 US dollars an ounce.
The main catalyst for the rally was China's decision at the weekend to allow greater flexibility in the yuan's exchange rate, which sent industrial metals higher.
A weaker greenback makes gold cheaper for traders using foreign currencies.
The yuan rose to a five-year high of 6.8089 to the dollar Monday. With China a net gold importer the gradual strengthening expected in the yuan is positive for gold demand, Dow Jones Newswires said.