SINGAPORE: Gold prices rebounded more than 1% in Asian trade on Monday after their biggest weekly fall in percentage terms since March 2020, with demand bolstered by a drop in US Treasury yields and a pause in the dollar’s rally.

Spot gold rose 1.1% to $1,781.86 an ounce by 0825 GMT while US gold futures edged up 0.8% to $1,782.90.

“The reversal in some of the strong gains we saw in bond yields last week has supported the market. Adding to that the dollar is trading a tad softer after the recent strength,” said Ole Hansen, head of commodities strategy at Saxo Bank.

“We’ll see some consolidation here and correction to the upside. Gold needs to break at least above $1,800 and the real battle is probably more around the $1,820 level.”

Gold fell more than 6% last week after the US Federal Reserve signalled tapering of its asset purchase programme and brought forward projections for the first post-pandemic interest rate increases into 2023.

“Over the next few months, if inflation readings do come higher consistently, and if we continue to see this progress in the labour market, too, then definitely markets will start pricing in a possible rate hike in 2022,” said Metals Focus research consultant Harshal Barot.