Gold rises, heads for best month since July 2020

Bengaluru

GOLD prices rose on Monday and were headed for their best monthly jump since July 2020, boosted by a weaker US dollar and lower bond yields, while growing inflationary pressure also lifted demand for the safe-haven metal as a hedge.

Spot gold was up 0.2 at US$1,906.91 per ounce by 0515 GMT, while US gold futures gained 0.3 per cent to US$1,913.10.

Bullion has risen nearly 8 per cent so far this month.

"Gold is pretty much drawing its strength from inflation fears and some inclination of the yields," said Stephen Innes, managing partner at SPI Asset Management.

"The dollar is staying weaker, that's fairly supportive. Gold bulls now have their eyes set on US$2,000 and most are thinking it's going to go quite higher."

The dollar index eased 0.1 per cent against its rivals, while the US 10-year Treasury yield fell to 1.593 per cent on Friday, reducing the opportunity cost of holding non-interest bearing gold.

Data on Friday showed US consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve's 2 per cent target and posting its largest annual gain since 1992.

Gold, often used as a hedge against inflation, has benefited from recent data showing a rise in prices in the United States and the United Kingdom.

Investors' focus this week will be on US payrolls data due on Friday with median forecasts at 650,000.

"On the technical front, a trade above the US$1,915.60 would, however, signal a resumption on the US$1,950 target... and there is strong support at the US$1,875 and US$1,850 levels," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note. REUTERS