Gold up from 1-month lows but stronger dollar, yields check gains

(Reuters) - Gold edged higher on Monday, with investors banking on the precious metal’s safe-haven appeal as concerns about an economic slowdown linger, after a stronger dollar and higher Treasury yields nudged prices to a one-month low.

FILE PHOTO: Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk

Spot gold was up 0.2% to $1,868.96 per ounce by 2:37 p.m. ET (1937 GMT). Earlier in the session, prices slipped to $1,860, their lowest since Jan. 6.

U.S. gold futures settled 0.2% higher at $1,879.50.

“Traders will look at gold as a safe-haven asset and buy into it,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Concerns over a slowdown remain and is likely to keep demand for gold on a firm footing this year, analysts said.

The dollar index advanced to an almost month-high, making gold more expensive for buyers holding other currencies. [USD/]

Benchmark Treasury yields also firmed, likely keeping some investors away from bullion. [US/]

Gold prices dropped more than 2% on Friday after data showed U.S. job growth accelerated sharply last month, with focus on speeches by a host of Fed officials this week, including Chairman Jerome Powell.

The Fed last week increased interest rates by a quarter of a percentage point to 4.5%-4.75% after a year of larger hikes, and investors are now pricing in the policy rate peaking at 5.05% in June.

Gold benefits from low interest rates, which reduce the opportunity cost of holding the zero-yield asset.

Spot silver dropped 0.4% to $22.26 per ounce, and platinum slipped 0.2% to $971.70.

Palladium was down 1.2% to $1,604.09 per ounce, after it fell more than 4% earlier to $1,556.53, its lowest since mid-December 2021.

“Among platinum group metals, supply disruptions in South Africa due to a deepening energy crisis should help to stabilise prices in the short term,” ANZ wrote in a note.

Reporting by Seher Dareen in Bengaluru; Additional reporting Arundhati Sarkar and Bharat Govind Gautam; Editing by Shounak Dasgupta, Krishna Chandra Eluri and Shailesh Kuber