Gold is rising from three-month lows as bond rates in the United States fall

Lower U.S. Treasury rates maintained demand for zero-yield metal afloat above the important psychological support level of roughly $1,800 per ounce on Monday, lifting gold from a more than three-month low reached the previous session. As of 0227 GMT, spot gold was up 0.1 percent at $1,812.15 per ounce. Gold futures in the United States rose 0.1 percent to $1,809.80.

“With $1,800 being such a large round figure, it’s natural for it to give some amount of support as some (traders) try to be bold and buy a dip, while others close out lucrative shorts,” said Matt Simpson, senior market analyst at City Index. Gold prices fell more than 1% on Friday, hitting its lowest level since February 4 at $1,798.86 per ounce, before finishing at $1,811.15.

“However, things aren’t looking good for gold bugs right now. Even if we see a recovery from $1,800, the momentum is obviously pointing lower “Simpson explained. As investors sought shelter owing to concerns about global growth, the dollar began the week barely below a 20-year high against peers, making rival safe-haven gold less appealing to purchasers holding other currencies.

However, 10-year Treasury rates in the United States decreased, boosting demand for non-interest bearing gold. Before the Federal Reserve can fairly conclude that inflation has peaked, it must fall for “many months,” Cleveland Fed president Loretta Mester said Friday, adding that if the numbers do not improve, she would be willing to support a rate rise sooner than the September meeting.

Despite its reputation as an inflation hedge, bullion is vulnerable to rising short-term interest rates and bond yields in the United States, increasing the opportunity cost of keeping it. Silver fell 0.1 percent to $21.06 per ounce, platinum was constant at $938.46, while platinum increased 0.3 percent to $1,949.88.