Gold prices rose on Monday on the back of a subdued dollar as investors considered the prospects of fewer interest rate hikes in the United States this year. Spot gold was up 0.2 percent at $1,320.80 per ounce as of 0643 GMT, after marking the highest since April 26 at $1,325.96 in the previous session.
US gold futures for June delivery were little changed at $1,320.80 per ounce. "Investors are watching the US bonds and the dollar closely and taking cue from there for the direction of gold price," said Joshua Rotbart, managing partner, J. Rotbart & Co in Hong Kong.
While gold prices were also drawing support from political uncertainty in the Middle East, investors said easing tensions elsewhere could add downside risks to prices. "From geopolitical point of view we are currently in an equilibrium between the prospects of 'good end' in the Korean peninsula against looming conflict in the Middle East between Iran and Israel. The price (of gold) reflects this balance," Rotbart said.
Spot gold looks neutral in a range of $1,317-$1,326 per ounce, Reuters technical analyst Wang Tao said.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.62 percent to 857.64 tonnes on Friday.
Speculators raised their net long position in COMEX gold, by 636 contracts to 52,621, in the week to May 8, US Commodity Futures Trading Commission (CFTC) data showed.
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