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Gold prices top $1,300, 1-month high

July 22, 2013: 3:42 PM ET

Gold prices rose to a 1-month high Monday, rising above $1,300 an ounce.

Gold prices surged more than 3% Monday, topping $1,300 an ounce for the first time in a month.

Prices of the precious metal were boosted by a weaker U.S. dollar, which declined against most global currencies, including the euro, the pound and the Japanese yen. Commodities such as gold are priced in the dollar and gain ground when the U.S. currency declines.

Gold prices had been falling until recently, as the dollar gained strength amid worries that the Federal Reserve would scale back its bond buying program sooner rather than later. In fact, prices plunged more than 20% between early May and late June.

But the Fed and chairman Ben Bernanke have been taking steps recently to soften their stance and reassure investors that monetary policy will remain "highly accommodative" for the foreseeable future. Worries that the Fed's program will undermine the dollar and spur higher inflation have resumed, pushing investors back into gold as a hedge against inflation.

Related: Gold: Time to buy now?

Gold prices are also moving higher thanks to a "big short-covering rally," said analysts at Lido Isle Investors, meaning that traders who had previously placed short positions on gold futures (bets on a price decline) are now buying to cover those bets.

Other precious metal prices also gained traction, with silver prices gaining more than 5%. Copper and platinum futures rose about 1%.

Gold miner stocks were also big winners Monday, helping boost the broader market. Newmont Mining (NEM) shares surged more than, making the stock the best performer in the S&P 500. Freeport-McMoran Copper & Gold (FCX) shares rose more than 2%.

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