Gold futures headed higher Monday morning, putting bullion on track to close above the $1,800-an-ounce threshold for the first time in about six weeks.
Bullion’s bullishness, however, appeared capped by a modest rise in the U.S. dollar and rates for benchmark Treasurys holding at or around multimonth highs.
Still, gold bulls make the case that the dollar has been tracking lower in recent days after hitting a peak earlier this month, paving the way for dollar-pegged assets to advance.
“The U.S. dollar has been retreating from the yearly highs reached earlier in October, as markets adjust to the spreading of inflation-related fears across the globe, which means that the same forces that supported the U.S. dollar earlier in the year are now propelling other currencies to fresh highs, a dynamic that penalizes the dollar and therefore supports gold,” wrote Ricardo Evangelista, senior analyst at ActivTrades in a Monday note.
At last check, December gold GCZ21, 0.75% GC00, 0.75% was trading up $7.70, or 0.4%, at $1,804.10 an ounce, following a 1.6% weekly climb that was put in on Friday, marking the fourth weekly advance in five weeks, according to Dow Jones Market Data, and the sharpest such rise for a most-active contract since the period ended Aug. 27.
On Friday, gold climbed after remarks from Federal Reserve Chairman Jerome Powell raised the likelihood that the central bank will soon start to slow, or taper, its monthly bond purchases.
Meanwhile, December silver SIZ21, 0.70% SI00, 0.70% was trading 7 cents, or 0.3%, at $24.52 an ounce, logging a 4.7% weekly climb, which was the sharpest weekly climb since May 7.