Gold gains capped by stronger dollar, yields

Gold rose on Monday, yet gains were limited by a stronger dollar and yields, with investors banking on the precious metal's safe-haven appeal as concerns about an economic slowdown linger.

Spot gold rose 0.3% to $1,871.25 per ounce by 10:05 a.m. ET (1505 GMT), after hitting its lowest since Jan. 6. U.S. gold futures gained 0.5% to $1,886.20.

"Traders will look at gold as a safe-haven asset and buy into it," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.


Concerns over a slowdown remain and that is likely to keep demand for gold on a firm footing this year, analysts said.

Weighing on gold, the dollar index advanced 0.6% to an almost month-high, making the yellow metal more expensive for buyers holding other currencies, with benchmark Treasury yields rising as well. [USD/] [US/]

Gold prices dropped more than 2% on Friday after data showed U.S. job growth accelerated sharply last month, with focus on speeches by a host of Fed officials this week, including Chairman Jerome Powell.

The Fed last week increased interest rates by a quarter of a percentage point to 4.5%-4.75% after a year of larger hikes, and investors are now pricing in the policy rate peaking at 5.05% in June.

Gold benefits from low interest rates, which reduce the opportunity cost of holding the zero-yield asset.

In other metals, spot silver rose 0.1% to $22.36 per ounce, platinum was steady at $973.92.

Palladium fell more than 3% earlier in the session to $1,560.97 per ounce, its lowest since mid-December 2021.

"Among platinum group metals, supply disruptions in South Africa due to a deepening energy crisis should help to stabilise prices in the short term," ANZ said in a note