Gold hits more than one-week peak as dollar and yields slip

The dollar slumped to an almost two-week low against a basket of rival currencies, making gold cheaper for buyers outside the United States.

Benchmark US Treasury yields slipped, moving further away from a 14-month peak hit last week, reducing the opportunity cost of holding non-yielding gold.

Better than expected recent economic readings out of the United States, meanwhile, have lifted hopes of swift recovery and drove investors towards riskier assets.

”Gold has formed a short-term double bottom but needs to break above USD 1,750 before it can head higher,” Stephen Innes, chief global market strategist at financial services firm Axi, said in a note.

”The metal could struggle to extend last week’s recovery with the positive US non-farm payroll data underpinning risk-on sentiment.”

The US economic outlook is brightening, Cleveland Federal Reserve Bank President Loretta Mester said on Monday, adding that the Federal Reserve should stick to its easy monetary policy to help to support growth further.

”The coordinated approach of central banks has kept gold supported for quite some time and that’s what we are also seeing today,” CMC’s McCarthy said. Elsewhere, silver fell 0.1 percent to USD 24.88 an ounce while palladium rose 0.3 percent to USD 2,671.97 and platinum edged 0.1 percent down to USD 1,207.43.