Gold prices gain as dollar weakness lifts appeal

Gold prices rose on Monday as the U.S.

dollar weakened, but recent gains are unlikely to stave off

another monthly fall for greenback-priced bullion.

Spot gold was up 0.4% at $1,860.77 per ounce, as of

0451 GMT. U.S. gold futures also climbed 0.4% to

$1,865.00.

“With the three-day holiday in the United States, which

means lower liquidity than usual, and a lack of top-tier data

until Wednesday, we may find that gold will remain nailed to its

tight range around $1,850 unless a new catalyst arrives,” City

Index senior market analyst Matt Simpson said.

Federal government offices, stock and bond markets, and the

Federal Reserve will be closed on Monday for the Memorial Day

holiday in the United States.

The dollar eased, making bullion more attractive for

buyers holding other currencies.

Despite a mostly positive showing since hitting an over

three-month low of $1,786.60 per ounce on May 16, gold prices

are on course for a second straight monthly fall for the first

time since March 2021, down about 1.9% so far.

“A large part of gold’s underperformance has been due to

investors moving to cash as equity markets fell, while lockdowns

in China also dented demand. Typically, June is a bearish month

for gold but that seasonal pattern appears to have been shifted

forward by one month,” Simpson said.

Asian equities followed Wall Street higher, as investors

wagered on an eventual slowdown in U.S. monetary tightening,

albeit after sharp hikes in June and July.

Higher short-term U.S. interest rates raise the opportunity

cost of holding non-yielding bullion.

Spot gold is expected to retest a resistance at $1,867 per

ounce, a break above could lead to a gain into $1,887-$1,892

range, according to Reuters’ technical analyst Wang Tao.

Spot silver rose 0.5% to $22.22 per ounce, platinum

firmed 0.4% to $957.58, and palladium gained 0.9%

to $2,079.68.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by

Sherry Jacob-Phillips, Rashmi Aich and Uttaresh.V)