Gold price touches five-month highs

Gold prices hit a five-month high on Monday as inflation concerns highlighted the metal’s appeal as a safe haven despite rising dollar and US bond returns.

Spot gold was just 0.1% higher at $ 1,866.03 an ounce, following a slight pullback earlier in the day due to profit taking. Gold futures in the United States, meanwhile, fell 0.1% to $ 1,866.60 an ounce.

There have been some routine profit taking by short-term futures traders, but the bullish trend for gold remains strong, said Jim Wyckoff, a senior analyst at Kitco Metals.

The bullion has gained around $ 100 in the last eight sessions, its longest bullish streak since May, as its appeal as a hedge against inflation has been fueled by a surge in consumer prices in the United States and when major central banks have maintained a moderate stance on interest rates.

Rate hikes tend to reduce the attractiveness of non-interest bearing gold by increasing the opportunity cost of holding the metal.

However, benchmark 10-year Treasury yields rose to a near-three-week high, increasing the opportunity cost of holding gold.

The dollar index gained 0.3% to a 16-month high against its rival currencies.

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