AMSTERDAM/LONDON: Gold inched higher on Monday as a weaker dollar and US Treasury yields bolstered its appeal, while investors awaited key data this week to assess the pace of economic recovery in the United States.
Spot gold was up 0.1% at $1,882.61 per ounce at 10:25 a.m. EDT (1425 GMT), having last week reached its highest since Jan. 8 at $1,889.75. US gold futures gained 0.3% to $1,881.50.
A tick lower in the dollar and US yields is acting in gold’s favour, Bob Haberkorn, senior market strategist at RJO Futures said, adding stronger equity markets were providing a counterweight.
The dollar was pinned near three-month lows, while U.S Treasury yields were subdued, reducing the opportunity cost of holding non-interest paying bullion.
Investors now await to hear if Federal Reserve speakers this week will stick to a patient policy, while awaiting data including US gross domestic product, jobless claims and durable goods.
“If (data) comes out substantially better-than-expected that would probably be bearish for gold, because the likelihood of a Fed taper (of its bond-buying programme) will be sooner rather than later,” Haberkorn said, adding if the data is worse-than-expected, gold could trade north of $1,900 fairly quickly.
The recent crash in bitcoin was also providing support to gold, analysts said.
“Gold prices are very strong at these levels. There are any number of things to scare investors into wanting to buy gold, but we also have a situation where in Europe, US and Canada, where the vaccines are starting to have a positive effect,” said Jeffrey Christian, managing partner of CPM Group.
“The economies are reopening and economic activity is strong ... Maybe gold prices could back off a little bit.”
Elsewhere, palladium fell 0.8% to $2,761.17 per ounce, silver gained 1% to $27.78, and platinum rose 0.7% to $1,175.13.
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