Gold Prices Strengthen in Range-bound Trading as Dollar Value Falls



Gold prices firmed in choppy trading on Monday as a weaker dollar supported bullion at the price of the greenback, although gains were capped by some investors who turned to more active assets. risky in Asia.

Spot gold rose 0.2% to $1,856.86 an ounce, by 0152 GMT. US gold futures edged up 0.1% to $1,859.40.

“With the 3-day holiday in the US meaning weaker than usual liquidity, and a lack of top tier data through Wednesday, we may find that gold will remain bound to its tight range. around $1,850 unless a new catalyst arrives,” Matt Simpson, City Index’s senior market analyst, said.

Federal government offices, stock and bond markets and the Federal Reserve will be closed on Monday for the Memorial Day holiday in the United States.

Despite a generally positive performance since hitting a more than three-month low of $1,786.60 an ounce on May 16, gold prices are on track for a second consecutive monthly decline for the first time since March 2021, down about 2.4% so far.

“Much of gold’s underperformance was due to investors turning to cash as equity markets tumbled, while lockdowns in China also weighed on demand. Generally, June is a bearish month for gold, but that seasonal trend seems to have shifted a month,” Simpson said.

Asian stocks followed Wall Street higher, while the dollar was pinned near its lowest level in five weeks, as investors bet on a possible slowdown in US monetary tightening, albeit after strong gains in June and July.

A weaker dollar makes bullion more attractive to buyers holding other currencies.

Higher US short-term interest rates increase the opportunity cost of holding non-performing bullion.

Spot silver rose 0.1% to $22.13 an ounce, platinum firmed 0.1% to $954.51 and palladium gained 0.8% to 2,079, $39.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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