Gold Hits a Week High as The Dollar Weakens And Yields Decline

Gold rose to the peak of the week of Tuesday, February 23rd, supported by the weak dollar and declining US Treasury yields, while the appeal of the yellow metal was boosted by fears of further rising inflation.

Spot gold rose 0.2% to $1812.06 an ounce, after hitting its highest level since February 6 at $1815.63 earlier in the session. US gold futures gained 0.2% to $1811.30.

The dollar reached its lowest levels in more than a month, reducing the cost of gold for holders of other currencies, while investors awaited testimony by Jerome Powell, US Federal Reserve Chairman, before Congress later today.

The US Treasury’s record yields fell from near the peak of a year it recorded on Monday, which reduces the opportunity cost of owning the precious metal that does not yield any returns.

Gold, which is often seen as a hedge against inflation, rose 1.5% in the previous session, as fears of rising inflation drove global stocks lower.

The European Central Bank indicated on Monday that policymakers are uncomfortable with the recent rise in government bond yields.

As for the other precious metals, silver fell 0.3% to $28.06 an ounce, after hitting a three-year high earlier at $28.31. Platinum settled at $1,272.52, while palladium fell 0.1% to $2,394.23.