Gold firms as dollar wilts, but US rate hike view curbs gains

LONDON: Gold edged higher on Monday, taking support from a retreat in the dollar as Italian political risk receded, but the prospect of a further US interest rate rise by the Federal Reserve this month kept a lid on gains.

The metal fell on Friday after stronger than expected US payrolls data shored up expectations that the Fed would press ahead with another rate hike at its June meeting.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion. They also boost the dollar, in which the metal is priced.