Gold prices edge higher on a weaker dollar and US Treasury yields

Gold inched higher on Monday as a weaker dollar and US Treasury yields bolstered its appeal, while investors awaited key data this week to assess the pace of economic recovery in the United States.

Spot gold was up 0.1 per cent at $1,882.61 per ounce at 10:25 am EDT (7:55 pm IST), having last week reached its highest since Jan. 8 at $1,889.75. US gold futures gained 0.3 per cent to $1,881.50.

Gold in New Delhi gained Rs 95 to Rs 48,015 per 10 gram amid a positive global trend and rupee depreciation, according to HDFC Securities. In the previous trade, it had closed at Rs 47,920 per 10 gram.

A tick lower in the dollar and U.S. yields is acting in gold's favour, Bob Haberkorn, senior market strategist at RJO Futures said, adding stronger equity markets were providing a counterweight.

The dollar was pinned near three-month lows, while U.S Treasury yields were subdued, reducing the opportunity cost of holding non-interest paying bullion.

Investors now await to hear if Federal Reserve speakers this week will stick to a patient policy, while awaiting data including US gross domestic product, jobless claims and durable goods. "If (data) comes out substantially better-than-expected that would probably be bearish for gold, because the likelihood of a Fed taper (of its bond-buying programme) will be sooner rather than later," Haberkorn said, adding if the data is worse-than-expected, gold could trade north of $1,900 fairly quickly.