Gold rose to a five-week high on Monday as markets reassessed the outlook for the US economy after Donald Trump is inaugurated as president later this month, taking support from the falling dollar and lower US Treasury yields. Spot gold was up 0.9 percent at $1,183.60 an ounce by 3:17 pm EST (2017 GMT) after touching $1,185.80, the highest since December 5. US gold futures for February delivery settled up 1 percent at $1,184.90.
The metal posted its biggest weekly increase in two months last week. This came after it slid more than 12 percent in the last quarter as Trump's election victory boosted expectations that his tax and spending policies would boost the dollar and inflation, prompting more US rate increases. "A slight pullback in yields and a tiny dip in the dollar and weaker equities are enough to support gold, which is starting to benefit from greater stability in emerging markets," said James Steel, chief metals analyst for HSBC Securities in New York.
Strong outflows from gold-backed exchange-traded funds have also lessened of late, while seasonal buying in the big Asian gold markets, where India is deep into wedding season and China is approaching the Lunar New Year, has been strong. Platinum and palladium, precious metals that also have industrial uses as autocatalysts, extended their rallies to new peaks. Spot platinum rose as much as 1.6 percent to $981.90 an ounce, a two-month high and near the 200-day moving average. Palladium rose 1.6 percent to a five-week high at $768.10. Silver was up 0.8 percent at $16.61.