Gold steadies near 5-month peak on subdued dollar

Gold steadied near a 5-month peak on Tuesday, buoyed by a subdued dollar as focus turned to key US economic data due later this week.

Spot gold was up 0.05% at $1,908.81 per ounce at 1237 GMT, having earlier touched its highest since Jan. 8 at $1,916.4.

US gold futures were up 0.3% at $1,911.70.

"It is quite clear from Friday's (consumer price) data that there are ongoing concerns about inflation emerging. This is all part of a developing story, and one which would develop very much in the second half of this year," independent analyst Ross Norman said.

The dollar index shed 0.2% against rivals, making bullion cheaper for those holding other currencies.

Keeping gold's advance in check was a slight uptick in US Treasury yields, translating into higher opportunity cost of holding non-yielding bullion.

"However, this (higher yields) is unlikely to weigh on gold for any prolonged period so long as yields remain below the rate of inflation. We therefore expect the price to climb to $2,000 per troy ounce by year's end," Commerzbank analyst Carsten Fritsch said in a note.

Gold, considered a hedge against inflation that could be triggered by widespread money printing by central banks to aid economic revival, recorded its best month of the year in May, supported in part by concerns about inflation.

Investors now await key US economic readings, with the main event of US payrolls figures due on Friday.

Spot gold may rise into a $1,932-$1,953 range, Reuters technical analyst Wang Tao said.

Silver was up nearly 1% at $28.32 per ounce. Palladium fell 0.2% to $2,824.54, while platinum fell 0.8% to $1,177.46.

"The disappointing performance of the platinum price recently is also reflected in ETF demand. In contrast to gold, platinum has registered ETF outflows of late," Fritsch added.