SINGAPORE: Gold prices rose in Asian trade on Wednesday, hovering near a seven-week high hit earlier this week, as a softer dollar and a retreat in US Treasury yields lifted demand for the safe-haven metal.
Spot gold was up 0.5% to $1,786.80 per ounce at 0657 GMT, after hitting $1,789.77 on Monday, its highest since Feb. 25.
US gold futures gained 0.5% to $1,786.90 per ounce.
“The US dollar had edged lower this morning, supporting prices, with gold’s upward momentum from overnight continuing in Asia,” OANDA senior market analyst Jeffrey Halley said.
“Providing that US 10-year yields remain softer, gold appears to be gathering strength for a test of the 100-day moving average at $1,802 an ounce in the days ahead.”
Market participants now await the European Central Bank meeting on Thursday for further clarity about stimulus plans for the bloc. The US Federal Reserve policy meeting is due next week.
Gold is seen as a hedge against inflation that could follow stimulus measures, but higher Treasury yields have dulled some of the appeal of the non-yielding commodity this year.
“In the big picture, gold prices are moving higher from lows established below $1,700 as the dollar remains weak and US yields declined in the face of a new driver - geopolitics,” Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
“With a delay due to the accelerating spread of the coronavirus, gold traders would expect the Fed and other central bankers to remain dovish.”
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