Spot gold rose 0.2% to $1,848.96 an ounce, 0201 GMT. Prices hit their highest level since May 12 at $1,853.55 earlier in the session.
US gold futures gained 0.4% to $1,847.90.
“It’s still unclear if gold has weathered the mid-term storm or if it’s just a rally in response to a sustained decline in the US dollar,” said Jeffrey Halley, principal analyst at OANDA.
The Dollar Index started the week on a level playing field, after posting its first weekly loss in nearly two months as investors reduced bets on a rise in the dollar following the rise in US rates and hoping that easing blocking measures in China could help global growth. [USD/]
A weaker dollar makes bullion more attractive to overseas buyers.
“Before going structurally bullish, I would need to see gold hold onto its recent gains against dollar strength, not dollar weakness,” Halley said.
Benchmark US 10-year Treasury yields, however, firmed after a series of three consecutive declines, limiting demand for zero-yield gold. [US/]
Federal Reserve Bank of St. Louis President James Bullard last week reiterated his view that the US central bank should raise interest rates to 3.5% this year to bring inflation under control faster. survey.
Bullion, considered a safe store of value in times of economic crisis, tends to become less attractive to investors when US interest rates rise, as it earns no interest.
Reflecting this sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.69% to 1,063.43 tonnes on Friday from 1,056.18 tonnes on Thursday. . [GOL/ETF]
Spot silver gained 0.4% to $21.84 an ounce, platinum firmed 0.3% to $958.10 and palladium climbed 0.7% to $1,978.45.