Gold Edges Higher as Dollar Weakness Overcomes Hormuz Tensions
Gold prices edged higher on Monday as the US dollar weakened against the yen, making bullion priced in US currency more attractive to buyers.
The spot price of gold rose by as much as 0.7% to $4,435 an ounce, erasing a loss from the previous session.
However, gains for gold were tempered by inflationary risks arising from disruptions to energy flows through the Strait of Hormuz, which pushed oil prices higher and increased concerns about inflation.
Tighter monetary policy is typically a headwind for non-yielding assets like gold, but many investors remain bullish on the metal's prospects as a portfolio hedge.
Christopher Wong, strategist at Oversea-Chinese Banking Corp, said that despite near-term headwinds, gold will likely grind higher as it rediscovers its traditional value and central banks continue to buy bullion.