GOLD prices dropped on Tuesday (May 31), as a higher dollar and rising US Treasury yields weighed on demand for greenback-priced bullion, which is set for a second straight monthly loss for the first time since March 2021.

Spot gold was down 0.5 per cent at US$1,847.50 per ounce, as of 12.57 am GMT. US gold futures were down 0.4 per cent at US$1,850.40.

Gold prices are down about 2.6 per cent so far this month, their most since September.

The dollar index rose, making bullion more expensive for buyers holding other currencies.

Benchmark US 10-year Treasury yields leaped on Tuesday after bond markets in the United States were closed in the previous session for the Memorial Day holiday, lowering the appeal of zero-yield gold.

The US Federal Reserve should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed, Fed Governor Christopher Waller said on Monday, as the central bank battles to bring down high inflation.

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Higher short-term US interest rates raise the opportunity cost of holding bullion.

Spot silver dipped 0.7 per cent to US$21.80 per ounce, and has fallen about 4.1 per cent so far this month.

Platinum fell 0.8 per cent to US$951.31, but is still set for its first monthly gain in 3 of about 2.1 per cent.

Palladium eased 0.2 per cent to US$2,029.61, and has dipped about 12.6 per cent this month, its most since November. REUTERS