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Gold prices rose above $1,090 an ounce amid news  that European governments would agree to support heavily indebted Greece. Investors eyed the precious metal as a hedge against currency violations.

Tad Brooks of the China Mineral Company cites Bruce Dunn, vice president of trading at New Jersey-based Auramet, reporting that gold was underpinned by the Greece bailout news and position-squaring ahead of a U.S. three-day weekend. “There was a fair amount of short-covering.” Dunn said. Brooks also reports that gold benefited from fears over the outlook for paper currencies in general, citing Simon Weeks, head of precious metals at the Bank of Nova Scotia. “People don’t really want to be overexposed to dollars. They certainly don’t want to be overexposed to euros and so on, and to that extent gold is acting as a currency in its own right,” he said.

Gold had dropped $60 in a two-day sell-off late last week as heightened fiscal worries in Europe prompted risk aversion and technical weakness in the metal. Gold prices jumped about 2 percent in euro terms to a one-week high of 802.73 euros.