Gold hits over 1-week high as dollar dips

Spot gold rose 0.3 per cent to US$1,850.39 an ounce, the highest since May 12, 2022. PHOTO: REUTERS

BENGALURU (REUTERS) - Gold prices touched a more than one-week high on Monday (May 23), as an easing dollar supported greenback-priced bullion, although rising US Treasury yields capped gains.

Spot gold rose 0.3 per cent to US$1,850.39 an ounce at 8.39am Singapore time, the highest since May 12. US gold futures also gained 0.3 per cent to US$1,847.90.

The United States dollar began the week on the back foot, following its first weekly loss in nearly two months, as investors cut bets on more dollar gains from rising US rates and hoped that easing Covid-19 lockdowns in China can aid global growth.

A weaker dollar makes bullion more attractive for overseas buyers.

However, benchmark US 10-year Treasury yields firmed, limiting demand for zero-yield gold.

Federal Reserve Bank of St Louis president James Bullard reiterated his view last week that the US central bank ought to raise interest rates to 3.5 per cent this year to get high inflation more quickly under control.

Bullion, seen as a safe store of value during times of economic crisis, tends to become less attractive to investors when US interest rates are raised because it yields no interest.

Asian stocks faced an uncertain start on Monday as persistent inflation fears and the prospect of rising interest rates dogged the global economic outlook.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.69 per cent to 1,063.43 tonnes on Friday from 1,056.18 tonnes on Thursday.

Spot silver was up 0.7 per cent at US$21.90 an ounce, platinum firmed 0.3 per cent to US$958.43, and palladium climbed 0.8 per cent to US$1,979.27.

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