NEW YORK: Gold rose more than 1.5% to a near one-week high on Monday, despite a jump in US Treasury yields, as expectations for rising inflation triggered equity valuation concerns and drove investors towards the safe-haven metal. Spot gold was up 1.6% at $1,810.45 an ounce by 11:39 a.m. EST (1639 GMT), after hitting its highest since Feb. 16 in the session.

US gold futures gained 1.8%, at $1,810.

“We are seeing investment flows into gold as market participants grow more anxious about rising real rates that can impact equity valuations,” said TD Securities commodity strategist Daniel Ghali, pointing to rising Treasury yields.

US benchmark 10-year treasury yields hit a near one-year high, increasing the opportunity cost of holding non-yielding bullion.

However, rising real yields and inflation concerns made equity valuations look more stretched in comparison and prompted investors towards safe-haven assets like gold, which is widely viewed as a hedge against inflation.

“The dollar at the moment is low and that is supporting. Also, the real reason for the gold prices to increase in the longer term is the chances of inflation picking up,” Commerzbank analyst Eugen Weinberg said.

The dollar index eased 0.1% against its rivals, making gold less expensive for holders of other currencies.

A $1.9 trillion US stimulus package is widely expected to pass by the end of the week, raising hopes of a speedy economic recovery but at the cost of rising inflation. Investors are also eyeing the testimony of US Federal Reserve Chairman Jerome Powell on the Semiannual Monetary Report to Congress on Tuesday.

The Fed and other leading central banks have pinned their hopes on ultra-low interest rates to get the economy out of the economic fallout from the COVID-19 pandemic. Elsewhere, silver rose 2.3% to $27.83 an ounce, while platinum eased 0.3% to $1,269.69. Palladium rose 0.2% to $2,383.25, after reaching a more than one-month high of $2,431.50.