Gold prices rose on Tuesday to their highest level in more than a week as a weaker dollar and pullback in US bond yields lifted demand for the safe-haven metal.
Spot gold was up 0.4 per cent at $1,734.72 per ounce by 10:04 am after hitting its highest since March 26 at $1,735.30. US gold futures were also up 0.4 per cent at $1,734.80 per ounce.
"After the strong economic data on Friday and yesterday (Monday) from the US, the dollar took a hit on its safe-haven appeal and investors rushed to park their money in riskier assets with more returns," said IG Market analyst Kyle Rodda.
The dollar slumped to an almost two-week low versus 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. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold. Meanwhile, recent better-than-expected economic readings out of the United States have lifted hopes around swift recovery and drove investors towards riskier assets.
"Gold has formed a short-term double bottom but needs to break above $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 support growth further.
Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement. Elsewhere, silver was flat at $24.90 per ounce, while palladium was down 0.4 per cent at $2,654.33 per ounce. Platinum inched down 0.1 per cent, to $1,207.50 per ounce.
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