By Geoffrey Smith 

Investing.com — Gold prices roared higher again on Monday, extending a three-session rally as confidence returned to global financial markets against a backdrop of slowly improving health data from Europe.

By 12:15 PM ET (1615 GMT), for delivery on the Comex exchange were up 2.6% at $1,688.55 a troy ounce, only slightly off an intraday high of $1,695.90 an ounce.

That’s the highest mark in nearly two weeks, in a rally driven by the prospect of a sharp recession and an extended period of low interest rates, along with big increases in government borrowing.

was up 2% at $1,650.40 an ounce. The premium of the futures contract over the physical product thus widened to the most in over a week, under the weight of heavy inflows into ETFs and other gold-backed products.

Holdings rose by 1.5 million ounces last week and are now up 10% in terms of claims on physical gold since the start of the year, according to analysts at BMO.

Much of that increase has gone into U.S.-backed ETFs, which track the Comex price rather than the London price.

E.B. Tucker, director of Metalla Royalty & Streaming, told the news site Kitco that “there’s maybe around $100 of paper gold trading for every ounce of real gold that’s in New York vaults.”

The recent extreme arbitrage suggests that “the people that have been arguing about manipulation in the gold market and talking about that for years (are) not as crazy as we once thought,” Tucker added.

Uncertainty continued to cloud the actions of some major players in the market. The Central Bank of Russia delayed the publication of its weekly reserves data for the third day, in what appeared to be an effort to conceal the degree of pressure on its foreign reserves as it tries to stabilize the ruble amid the ongoing price war in oll.

rose 3.7% to $15.03 an ounce, on the back of similar inflows into silver ETFs, where AUM rose by 4.35 million ounces last week.

rose 2.2% to $733.60 an ounce.

The risk-on attitude in global markets was also reflected in other haven assets, with the Japanese yen weakening against the dollar, and U.S. Treasury yields rising by between four and seven basis points along the yield curve.