Growing optimism for a $1.9 trillion US stimulus plan and rising inflation expectations supported benchmark Treasury yields, which in turn pushed the dollar to a more than one-week peak.
The non-farm payrolls data last week has bolstered bets the easy monetary policy is with us for a bit longer than expected, said DailyFX currency strategist Ilya Spivak.
"We will see a sharp rise in investment demand. Amid low interest rates and higher stock prices, people are looking at gold to diversify their investments," he added.