Gold prices rose back towards the previous day's two-week high on Tuesday, extending gains for a fifth straight session, as a sell-off in the dollar and stock markets bolstered bullion's safe-haven appeal, reports Reuters.
Spot gold was up 0.3 per cent at $1,858.39 per ounce as of 1207 GMT, after hitting its highest since May 9 on Monday at $1,865.29. US gold futures rose 0.5 per cent to $1,856.80.
The dollar is easing again and will continue to support gold until there is some hawkish statement from the Federal Reserve, said Quantitative Commodity Research analyst Peter Fertig.
The greenback hit a one-month low as a broad sell-off in stock markets failed to boost the US currency's safe-haven appeal. US 10-year Treasury yields edged lower.
"Gold is in a great space at the moment, with almost all supporting markers favouring the yellow metal," DailyFX analyst Warren Venketas wrote in a note.
"US 10-year TIPS has plateaued, giving added impetus to gold upside because of the reduced cost of holding gold - traditionally an inverse relationship."
Gold is seen as a safe store of value during times of economic crisis and a hedge against inflation, but rising interest rates tend to weigh on non-yielding bullion.
European Central Bank President Christine Lagarde said she saw the ECB's deposit rate at zero or "slightly above" by September end, implying an increase of at least 50 basis points from its current level.
"Lagarde's comment came as a surprise to the market," added Fertig. "In the long run for gold, increasing interest rates faster than the market expected would imply that opportunity costs for holding gold for investors will increase."
Spot silver rose 0.7 per cent to $21.92 per ounce, while platinum eased 0.4 per cent to $955.01. Palladium gained 0.6 per cent to $2,005.65.
Gold ticks higher as subdued dollar boosts appeal
FE Team | Published: May 24, 2022 22:42:40
Gold ticks higher as subdued dollar boosts appeal
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