Gold prices gained on Monday as the passage of a US stimulus bill stoked inflation risks, although a resultant bounce in Treasury yields kept gains in check.
FUNDAMENTALS
Spot gold rose 0.3% to $1,732.02 per ounce by 0134 GMT, while US gold futures for April delivery rose 0.7% to $1,730.90 per ounce.
Yields on benchmark 10-year notes held near their highest in more than a year on continued US economic optimism after a $1.9 trillion recovery package was signed into law last week.
- Gold is generally considered a hedge against inflation, although higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion.
US producer prices increased strongly in February, leading to the largest annual gain in nearly 2-1/2 years, data showed on Friday.
The number of Americans filing new jobless claims fell to a four-month low last week, while the US market morale rose to its highest in a year in early March.
Investors piled into equities, while pulling money out of gold and bonds in the week up to March 10, data from BofA Global Research showed.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 1,052.07 tonnes on Friday from 1,055.27 tonnes on Thursday.
Silver rose 0.9% to $26.14, platinum rose 1% to $1,217.37, while palladium fell 0.1% to $2,369.17.
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