Gold prices climb to 1-week high as US dollar drops

On Monday, gold prices edged up to a one-week high as the greenback declined amid the deteriorating economic growth prospects.

The bullion futures accelerated 1.11% or 20.41 points to $1,862.51 per troy ounce. At the same time, the spot gold hiked 0.99% or 18.53 points to $1,865.12 per troy ounce.

Meanwhile, the US dollar index, which moves inversely from the precious metal, lowered 0.95% or 0.99 points to 102.15.

Nevertheless, the American 10-Year treasury yields rose 1.40% or 0.03 points to the 2.83 level, capping gold gains.

Accordingly, the Federal Reserve will release the minutes from its latest meeting on Wednesday.

Last week, St. Louis Fed President James Bullard reiterated that the bank should hike interest rates to 3.50% in 2022. This suggested move would control inflation quicker but poses recession risks.

Likewise, Fed Chair Jerome Powell guaranteed an aggressive stance to counter the multi-decade consumer prices. Correspondingly, concerns of a US economic slowdown pulled the dollar lower, benefitting the safe haven gold.

In Asia-Pacific, the Reserve Bank of New Zealand will announce its policy decision on Wednesday. Then, the Bank of Korea will hand down its decision a day later.

US downbeat economic data benefits gold

The recent dampened economic data in the United States also highly bolstered the latest movement of gold.

For instance, the US existing home sales skidded to an annual rate of 5.61 million units in April, well below the anticipated 5.65 million. Then, the figure also declined from the previous 5.75 million, weighing on the greenback.

Additionally, American initial jobless claims rose to 218,000 for the week ended May 14, outpacing the market consensus of 200,000.

Then, the reading came in higher than the prior 197,000, marking the highest level since January. This movement reflected tighter labor market conditions, a bearish indicator for the USD. On the other hand, gold benefitted from uncertain economic issues as investors skid from riskier assets.