LONDON: Gold prices rose over 1% on Monday, boosted by a slide in US dollar to its lowest in a month, while growth concerns in the economy kept bullion’s safe-haven demand intact.

Spot gold rose 0.8% to $1,860.34 per ounce by 1058 GMT. Prices hit their highest since May 9 at $1,865.29 earlier in the session. US gold futures gained 1% to $1,860.00.

The dollar slumped 1% as investors kept up selling pressure, cutting bets on further dollar gains from rising US rates. A weaker dollar makes gold cheaper for overseas buyers.

“Gold bugs are drawing strength from a weaker dollar, concerns over accelerating inflation, and global growth fears... In the near term, a weaker dollar could provide the precious metal a tailwind, lifting prices further away from the 200-day simple moving average,” FXTM analyst Lukman Otunuga said.

“While gold seems to be pushing higher, the Federal Reserve’s aggressive approach towards high-interest rates could act as a major roadblock for the zero-yielding metal.”

Gold is considered as a hedge against inflation and a safe haven during economic turmoil. However, it is extremely sensitive to US interest rates because the bullion yields no interest.

St. Louis Federal Reserve Bank President James Bullard reiterated his view last week that the US central bank ought to raise interest rates to 3.5% this year to get high inflation more quickly under control.

ANZ Research in a note said the rising risk of underperformance in equity markets has also enhanced gold’s risk-diversifier appeal.

Stocks hovered just above bear market territory as economic fallout from the war in Ukraine and persistently high inflation capped gains in equity benchmarks.

Spot silver gained 1.7% to $22.11 per ounce, platinum firmed 1.8% to $972.57, and palladium climbed 3.2% to $2,026.56.