Bullion has erased its 2021 losses, and is one of the best-performing metals in May, amid signs of rising inflation and a potentially uneven economic recovery due to the resurgence in coronavirus cases in some countries. Investor interest has also returned, with hedge funds and other large speculators boosting their net-long position in gold to the highest since early January, while holdings in bullion-backed exchange-traded funds have climbed in May following three straight months of declines.
“It’s been a great month for gold price performance for a number of reasons — a weaker U.S. dollar, slightly lower bond yields and a surprise CPI print in the U.S. started to spark inflation fears,” said John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “There is also growing concern over a new wave of Covid in Southeast Asia, which is adding to investors fears around a slower global recovery.”
Spot gold advanced 0.2% to $1,907 an ounce by 9:49 a.m. in Singapore, and is up 7.8% this month. Prices climbed to $1,912.76 last week, the highest since Jan. 8. Silver and platinum advanced, while palladium was steady. The Bloomberg Dollar Spot Index headed for a second straight monthly drop.
– Bloomberg