Gold near recent highs on rate-hike bets

Gold prices rose on Monday, supported by a slight pullback in the U.S. dollar and Treasury yields, although yellow metal’s outlook remained pressured by aggressive interest rate hikes by major central banks.

Spot gold soared 0.2% at $1,854.83 per ounce by 0.554 GMT, while U.S. gold futures surged 0.4% to $1,857.60.

According to Reuters, Gold was still trading below last week’s near one-month highs with prices dropping about 1% on Friday after economic data.

The U.S. Federal Reserve is set track for 50pbs interest rate hikes at June and July policy meetings.

It should be noted that higher rates raise the opportunity cost of holding gold, which yields no interest, while safe-haven bullion is also viewed as a hedge against inflation.