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Metals Stocks: Gold prices resume climb toward resistance at $1,900 as dollar, yields weaken

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Gold futures on Monday climbed, attempting to test resistance around $1,900 an ounce, as a subdued U.S. dollar and Treasury yields lent some support to bullion buying.

June gold
GCM21,
+0.42%

GC00,
+0.42%

 rose $5.20, or 0.3%, to trade at $1,881.90 an ounce, following a weekly gain of 2.1%, which marked the metal’s third straight weekly advance.

Some strategists view $1,900 for gold as a point of resistance that could help gauge how bullish investors have become about bullion.

Still, gold’s recent ascent is setting it up for the best monthly gain since December as worries about a choppy recovery from COVID in parts of the world and uncertainties about inflation have helped to support the precious metal, strategists said.

“Falling Treasury yields and a softer tone surrounding the greenback have provided good conditions for gold prices to rise,” wrote Sophie Griffiths, market analyst at Oanda, in a note.

The 10-year Treasury yield
TMUBMUSD10Y,
1.593%

was edging lower from last Friday’s finish at around 1.62%. Rising yields can compete against precious metals, which don’t offer a coupon, against investors seeking assets perceived as havens.

Meanwhile, the dollar was off 0.1%, as measured by the ICE U.S. Dollar Index
DXY,
-0.21%
.
A weaker buck can make assets priced in the currency more attractive to overseas buyers.

Turbulence in crypto assets, like bitcoin
BTCUSD,
+11.54%
,
also has provided some support to bullion, strategists speculate.

“The huge selloff in crypto land could have also played a role, with investors likely looking towards gold after liquidating positions in cryptocurrencies such as bitcoin,” Griffiths said.

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