Gold prices soared on Monday, May 14, as the dollar retreated from a 2018 peak after subdued U.S. inflation data last week highlighted the prospect of fewer U.S. interest rate increases than previously expected this year.
Spot gold was up 0.1 percent at $1,318.9 an ounce at 1252 GMT, having touched $1,325.96 on Friday, its highest since April 26. U.S. gold futures were down 0.1 percent at $1,318.8.
A weaker U.S. currency makes dollar-denominated gold cheaper for holders of other currencies — a relationship used by funds to generate buy and sell signals.
Though the dollar eased on Monday, its performance against a basket of other major currencies touched 93.416 last week for a gain of more than 4 percent since April 17 and its highest level since December.
“Gold is dollar-driven but it is doing reasonably well given the dollar is generally stronger,” said Macquarie commodities strategist Matthew Turner.
However, gold is expected to remain in the narrow range in which it has been trading this year — mostly between $1,300 and $1,350 — unless supply or demand fundamentals change dramatically, Reuters reports.
“Gold’s trading range in the first four months between low and high price was the lowest in percentage terms since it was fixed to the dollar in 1971,” Turner said.
Silver was up 0.1 percent at $16.63 an ounce, platinum fell 0.2 percent to $920.00 and palladium
slipped 0.2 percent to 994.25.
