Gold rose on speculation the biggest drop in a year spurred more physical purchases before China’s Lunar New Year holiday.

Consumers in China, the largest gold buyer, traditionally purchase bullion ahead of the holiday, which starts next week. Volumes traded on the Shanghai Gold Exchange were the highest in a month last week. Silver rose as much as 2.1 percent on Monday.

Holdings in gold-backed funds rose to the highest since October on Feb. 6. Assets increased from the lowest since 2009 last month, partly as stimulus in Europe and China and Greek talks to end austerity measures boosted haven demand. Prices dropped 2.4 percent on Feb. 6 after data showed the U.S. added more jobs than forecast in January.

“Physical demand is strengthening as we approach the Chinese New Year,” Bernard Sin, a trader at refiner MKS (Switzerland) SA, said by phone Monday. “We also saw some bargain hunting after Friday’s price drop, particularly in ETFs.”

Bullion for immediate delivery added as much as 0.7 percent to $1,243.04 an ounce and was at $1,241.83 by 10:05 a.m. in London, according to Bloomberg generic pricing. Gold for April delivery rose 0.6 percent to $1,241.70 on the Comex in New York.

Trading volume was 25 percent below the 100-day average for this time of day, according to data compiled by Bloomberg.

Prices dropped to a three-week low on Feb. 6 as the better-than-expected jobs data boosted expectations that the Federal Reserve will move toward increasing interest rates. Higher rates curb gold’s appeal because the metal generally gives investors returns only through price gains.

Silver for immediate delivery advanced 1.9 percent to $17.045 an ounce in London. Platinum added 0.1 percent to $1,225 an ounce and palladium was little changed at $784.13 an ounce.