Gold prices rise as the market expects that after a series of weak economic data statistics of the world's leading central banks resort to further ease policy.

Index of ISM, which reflects activity in the manufacturing sector of the U.S. economy in June fell to 49.7 points from 53.5 points in May, with projections of 52 points.

Activity in the euro zone manufacturing sector is also declining, and unemployment rose in May.

Many analysts expect the European Central Bank meeting on Thursday to reduce interest rates by 25 basis points to a record low of 0.75 percent per annum. Also, the market expects that the U.S. Federal Reserve will announce the third phase of "quantitative easing" at a meeting July 31 - August 1.

Low interest rates are usually favorable for gold, not bearing interest, since the reduced opportunity cost of investing in precious metals as compared to financial instruments.

August gold futures on the COMEX today, went up to 1620.7 dollars per ounce.