Spot gold rose 0.3% to $1,850.39 an ounce by 0039 GMT, its highest level since May 12. US gold futures GCv1 also gained 0.3% to $1,847.90.
The dollar started the week on the back foot, after its first weekly loss in nearly two months, as investors cut bets on more dollar gains from higher US rates and hoped that easing blockages in China could contribute to global growth.
A weaker dollar makes bullion more attractive to foreign buyers.
However, benchmark 10-year US Treasury yields firmed, limiting demand for zero-yield gold. WE/
St. Louis Federal Reserve Chairman James Bullard reiterated last week that the US central bank should raise interest rates to 3.5% this year to bring high inflation under control more quickly. (Full story)
Bullion, considered a safe store of value in times of economic crisis, tends to become less attractive to investors when US interest rates rise, as they earn no interest. (Full story)
Asian stocks faced an uncertain start on Monday as
Inflation fears and the prospect of higher interest rates weighed on the global economic outlook. MKTS/GLOB
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.69% to 1,063.43 tonnes on Friday from 1,056.18 tonnes on Thursday.
Spot silver rose 0.7% to $21.90 an ounce, platinum firmed 0.3% to $958.43 and palladium climbed 0.8% to 1,979 $.27.