Gold prices up from 3-month lows as dollar surge slows

GOLD prices on Monday (May 16) rose above the more-than-3-month low level hit in the previous session, as a weaker dollar outweighed pressure from higher US Treasury yields.

Spot gold was up 0.3 per cent at US$1,815.69 per ounce, as of 12.57 am GMT. US gold futures gained 0.2 per cent to US$1,812.20.

Gold fell more than 1 per cent on Friday to its lowest since Feb 4, and marked its fourth straight weekly decline.

The dollar steadied on Monday after a fall in the previous session, but the greenback still recorded a sixth straight weekly gain last week on global economic growth concerns. A strong dollar makes rival safe-haven gold less attractive for buyers holding other currencies.

Benchmark US 10-year Treasury yields were up for a second straight session, limiting demand for non-interest bearing gold.

Inflation will need to move lower for “several months” before Fed officials can safely conclude it has peaked, Cleveland Fed president Loretta Mester said Friday, adding she would be ready to consider faster rates hike by the September Fed meeting if the data do not show improvement.

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Gold faces fourth weekly loss as burgeoning dollar saps appeal

Although seen as an inflation hedge, bullion is sensitive to rising US short-term interest rates and bond yields, which raise the opportunity cost of holding it.

US consumer sentiment slumped to its lowest level in nearly 11 years in early May as worries about inflation persisted, but household spending remains underpinned by a strong labour market and massive savings, which should keep the economy expanding.

Spot silver was up 0.5 per cent at US$21.17 per ounce, platinum gained 1.3 per cent to US$950.84, and palladium rose 0.7 per cent to US$1,957.88. REUTERS