Gold Up to Highest Level in Four Months, as Signs of Bullish Trend Also Emerge

Singapore (May 24)  Gold was up on Monday morning in Asia, trading near its highest level in four months as hints of a bullish trend start to emerge.

Gold futures were up 0.39% to $1,884.05 by 12:04 AM ET (4:04 AM GMT) after climbing up to $1.890.13, their highest level since Jan. 8, during the previous week.

The dollar, which usually moves inversely to gold, inched up on Monday but remained near its lowest level in three months. The benchmark 10-year Treasury yield fell, remaining near a week low.

Lingering investor concerns about runaway inflation and ongoing COVID-19 outbreaks in several countries capped three consecutive weeks of gains for the yellow metal.

Lockdowns in India prompted by the country’s biggest wave of COVID-19 so far, alongside a jump in domestic prices, put a damper on the physical gold market.

Although inflation expectations have recently declined thanks to the U.S. Federal Reserve’s commitment to its currently dovish policy, they have not completely disappeared as investors worry that the U.S.’ continuous recovery from COVID-19 could fuel price pressure and see central banks start to pull back the unprecedented stimulus measures.

Several Fed officials, including governor Lael Brainard, are due to speak throughout the week..

Volatility in the cryptocurrency market, particularly bitcoin, was also on investors’ radars. Former U.S. Treasury Secretary Lawrence Summers told Reuters that cryptocurrencies offered an alternative to gold for those seeking an asset “separate and apart from the day-to-day workings of governments.”

They could potentially remain as a feature of global markets as something akin to “digital gold,” even if their importance in economies remains limited, he added.

In other precious metals, palladium inched down 0.1% and silver was steady at $27.52, while platinum gained 0.4%.

Investing.com