Moneycontrol PRO

Gold prices rise in range-bound trade as dollar dips

Spot gold was up 0.2% at $1,856.86 per ounce, as of 0152 GMT. U.S. gold futures edged 0.1% higher to $1,859.40.

May 30, 2022 / 07:52 AM IST

Gold prices firmed in choppy trading on Monday, as a weakening dollar buoyed greenback-priced bullion, although gains were capped by some investors turning to riskier assets in Asia.

Spot gold was up 0.2% at $1,856.86 per ounce, as of 0152 GMT. U.S. gold futures edged 0.1% higher to $1,859.40.

"With the 3-day holiday in the U.S., 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.

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 2.4% so far.

Close

"A large part of gold's underperformance has been due to investors moving to cash as equity markets fell, whilst 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 stocks followed Wall Street higher, while the dollar was pinned near five-week lows, as investors wagered on an eventual slowdown in U.S. monetary tightening, albeit after sharp hikes in June and July.

A weaker dollar makes bullion more attractive for buyers holding other currencies.

Higher short-term U.S. interest rates raise the opportunity cost of holding non-yielding bullion.

Spot silver rose 0.1% to $22.13 per ounce, platinum firmed 0.1% to $954.51, and palladium gained 0.8% to $2,079.39.
Reuters
first published: May 30, 2022 07:53 am
Sections
ISO 27001 - BSI Assurance Mark