World gold slightly increased as US bond yields fell
Gold prices rose slightly on Monday (May 16) as a decline in US bond yields offset the barrier from a relatively strong dollar, which, together with the possibility of interest rate hikes, previously pushed gold down. to the lowest level in more than 3 and a half months.
Closing the session on Monday, the spot gold contract advanced 0.3% to 1,817.12 USD/oz, after touching the lowest level since Jan. 31 at 1,786.60 USD/oz. Gold futures added 0.3% to $1,814 an ounce.
Bob Haberkorn, Senior Market Strategist at RJO Futures, believes that gold's slight uptrend is due to lower US government bond yields and a slight drop in the dollar; at the same time, think that the general trend of the USD is still high because the US Federal Reserve (Fed) is strongly raising interest rates.
The dollar index weakened, but remained hovering near a two-decade high, making gold more expensive for foreign buyers.
Although gold is seen as a hedge against inflation, higher interest rates to curb inflation will reduce the attractiveness of gold, which does not yield yields.
“Many people still see gold as undervalued and are even more willing to buy the precious metal when prices decline,” said Fawad Razaqzada, Market Analyst at City Index.