London, May 8 (BNA): Gold prices rose on Monday as the dollar weakened, while investors awaited key US inflation data due this week that could influence the Federal Reserve’s monetary policy stance.
Spot gold was 0.3% steady at $2,021.80 an ounce, as of 0323 GMT. And US gold futures rose 0.2 percent to $ 2028.20.
The dollar index fell 0.1%, making bullion more attractive to overseas buyers, Reuters reported.
US Consumer Price Index (CPI) data is due on Wednesday.
Tim Waterer, senior market analyst at KCM Trade, said that any signs of declining inflation will hinder the US currency due to expectations of lower interest rates from the Federal Reserve, which may see gold heading higher.
Traders also keep a tab on developments surrounding the US banking sector and the US debt ceiling.
US Treasury Secretary Janet Yellen on Sunday issued a stark warning that Congress’ failure to act on the debt ceiling could lead to a “constitutional crisis”.
Waterer said gold would be among the “major beneficiaries” if there are further signs of weakness in the US economy and prices could move to $2,100 sooner rather than later.
Economic uncertainty and lower rates attract demand for zero-yield bullion.
“We are building on precious metals in May…we expect a trading range between $1954 and $2080 an ounce of gold (in May),” Edward Meir, metals analyst at Marks, said in a note.
On the physical front, China held 66.76 million ounces of gold at the end of April, up from 66.50 million ounces at the end of March.
Spot silver rose 0.2% to $25.70 an ounce.
Platinum rose 0.2% to $1,061.36, and palladium rose 1.3% to $1,510.55.
“Platinum is regaining investor interest as fundamentals improve,” ANZ wrote in a note.
“Mining challenges in South Africa weigh on supply recovery this year, while demand is being supported by gold as well as substitution away from palladium.”
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