Gold rose slightly on Monday as a pullback in US Treasury yields offset pressure from a relatively firm dollar which, coupled with looming interest rate hikes, had pushed bullion to a low of more than three and a half months.
Spot gold gained 0.3% to $1,817.12 per ounce, after hitting a Jan. 31 low of $1,786.60. US gold futures closed 0.3% higher at $1,814.
Gold’s slight rebound is attributed to a drop in Treasury yields and a small pullback in the dollar, said Bob Haberkorn, Senior Market Strategist at RJO Futures, adding that the dollar’s overall trend was “still strong as the The Fed is being aggressive with its rate hikes.”
“Taking all of this into account, gold is holding up, it should be significantly lower … it will find support slightly below the $1,800 level. Also, there is huge demand for physical gold and silver.”
Gold is seen as a hedge against inflation, but rising interest rates to curb rising prices curb appetite for bullion, which pays no interest.
Gold is still seen by many as highly undervalued, and would be even more willing to buy the metal now that prices have weakened,” said Fawad Razaqzada, market analyst at City Index.
Spot silver gained 2.2% at $21.53 an ounce, having hit its lowest since July 2020 on Friday.