Gold prices have witnessed a five-month peak, supported by the decline of the dollar and growing inflationary pressures.
The rise in gold prices also came at a time when investors are waiting for more US data to derive indications about the extent of the global economic recovery.
Gold prices rose in spot transactions by 0.1% to $1,910.24 per ounce. The princely futures contracts for gold increased 0.4% to $1,913 dollars.
Gold prices
“Gold prices are riding a very strong upward trend … this is against the backdrop of a falling U.S. dollar and also inflation concerns,” said Margaret Yang, a strategist at DailyFX.
“Perhaps another fundamental factor behind gold is the return of Chinese and Indian buyers. In the near-term, if gold can breach the $1,922 per ounce mark, it can open the room for further upside potential.”
The dollar index fell 0.2% percent against other major currencies, making gold less expensive for holders of other currencies. The US currency recorded its second consecutive monthly loss.
“The dollar is staying weaker, that’s fairly supportive. Gold bulls now have their eyes set on $2,000, and most are thinking it’s going to go quite a lot higher,” said Stephen Innes, managing partner at SPI Asset Management.
Data last week showed that US consumer prices rose in April, while the measure of core inflation exceeded the Federal Reserve’s target of two percent.
Job data
Market participants will focus this week on important economic readings from the US, including the non-farm payrolls data due on Friday.
As for other precious metals, silver increased 0.4% to $28.17 an ounce, after touching its highest level in two weeks earlier in the session.
Palladium rose 0.8% to $2852.93, and platinum rose 0.2% to $1188.86.
A few days ago, gold prices crossed the psychologically important level at $1900 an ounce, supported by the dollar’s decline and growing concerns about inflation, after US Federal Reserve officials maintained a dovish stance on interest rates.
Spot gold rose 0.3% to $1,905.36 an ounce, its highest since Jan. 8.
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