Gold prices climbed on Monday to hover
near a 4-1/2-month high, supported by a weaker U.S. dollar and
growing inflationary pressure, while a slide in cryptocurrencies
further lifted the safe-haven metal’s appeal.
Spot gold was up 0.2% at $1,883.21 per ounce by 0301
GMT. Last week, gold prices hit their highest level since Jan. 8
U.S. gold futures rose 0.4% to $1,884.30 per ounce.
“The U.S. dollar index remain relatively weak and the
manufacturing and service PMI’s from the U.S. and Europe
actually raised the prospect of inflation in months to come,”
Margaret Yang, a strategist at DailyFX said.
“Recent slide in cryptocurrencies also boosted the appeal of
gold as an alternative investment asset. Gold’s upward momentum
is very strong and it is likely to challenge a key psychological
level at $1,900 in the days to come.”
The dollar stood near its lowest levels in three months
against the resurgent euro and other European currencies, making
gold cheaper for other currency holders.
Rising U.S. inflationary risks have spooked markets after
data showed rise in consumer prices and pick up in factory
activity, lifting gold’s appeal as an inflation hedge.
Indicative of sentiment, holdings of SPDR Gold Trust ,
the world’s largest gold-backed exchange-traded fund, rose 0.6%
to 1042.92 tonnes on Friday. Speculators raised their net long
positions in COMEX gold in the week ended May 18.
Further contributing to gold’s move, bitcoin fell
13% on Sunday, sending it down ~50% from the year’s high after
Beijing stepped up its efforts to crack down on bitcoin mining
The White House said on Friday it had pared down its
infrastructure bill to $1.7 trillion from $2.25 trillion, but
Republicans dismissed the changes as insufficient for a deal.
Elsewhere, palladium jumped 1% to $2,810.32 per
ounce, silver gained 0.4% to $27.64 and platinum
climbed 0.6% to $1,173.03.
(Reporting by Brijesh Patel in Bengaluru, Editing by Sherry