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Gold on track for best month since last summer amid weaker dollar & inflation woes

Gold on track for best month since last summer amid weaker dollar & inflation woes
The price of gold continued to rise on Monday, headed for its best monthly performance since July. Inflationary pressure, a weaker US dollar, and lower bond yields have driven demand for the safe-haven metal as a hedge.

Spot gold was up 0.4% at $1,909.81 per ounce, while US gold futures gained 0.4% to $1,913. Gold prices settled above $1,900 an ounce last week, breaching the important resistance level for the first time in around five months. Bullion has risen almost 8% this month.

“Gold is pretty much drawing its strength from inflation fears and some inclination of the yields,” Stephen Innes, managing partner at SPI Asset Management, told Reuters. “The dollar is staying weaker... Gold bulls now have their eyes set on US$2,000 and most of the guys are thinking it's going to go quite higher,” he added.

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Gold, which is often used as a hedge against inflation, has benefited from a recent rise in prices in the United States and Britain. US Federal Reserve officials said last week they would not be surprised if supply shortages push prices up in the coming months as the world recovers from the pandemic and pent-up demand is unleashed.

“On the technical front, a trade above the US$1,915.60 would, however, signal a resumption on the US$1,950 target... and there is strong support at the US$1,875 and US$1,850 levels,” said Phillip Futures senior commodities manager Avtar Sandu.

The prices of other metals are also on the rise, with palladium climbing 0.5% to $2,839.72 per ounce and platinum jumping 0.9% to $1,187.50. Silver rose 0.7% to $28.07 and is heading for its best monthly gain since December.

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