NEW YORK: Gold prices climbed to a more than one-week high on Monday, supported by inflation worries and lingering geopolitical risks, as markets awaited key US inflation data for cues on the Federal Reserve’s interest rate hike trajectory. Spot gold rose 0.6% to $1,818.86 per ounce by 12:32 p.m. ET (1732 GMT), after hitting its highest level since Jan. 27 at $1,819.65 earlier in the session.
US gold futures gained 0.6% at $1,819.30.
“There’s a bit more flight-to-safety buying in the gold market... The main concern right now is where are we headed with inflation and how aggressive the Fed will be,” said Bob Haberkorn, senior market strategist at RJO Futures.
Benchmark 10-year US Treasury yields hovered near their highest levels since December 2019 after an upbeat US employment report on Friday.
US inflation figures for January are due on Thursday, with markets now pricing in a one-in-three chance the Fed might hike by a full 50 basis points in March.
Although gold is considered a hedge against higher inflation and a safe store of value in times of uncertainty, higher rates raise the opportunity cost of holding non-yielding bullion.
Russia-Ukraine tensions are also on the back of everyone’s minds, Haberkorn said.
White House national security adviser Jake Sullivan said on Sunday that Russia could invade Ukraine within days or weeks but might still opt for a diplomatic path.
Gold and silver prices were boosted in part by a US dollar index that has dropped sharply from its late-January high, Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.
Meanwhile, speculators cut their net long COMEX gold position in the week to Feb. 1, data showed on Friday.
Among other precious metals, silver jumped 2.3% to $22.99 per ounce, platinum declined 0.5% to $1,018.85, and palladium fell 0.7% to $2,269.75.
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