Gold rises 1% driven by dollar weakness

Gold prices rose 1% on Tuesday as a weak dollar increased bullion’s attractiveness amid rising inflationary expectations.

At 1224 GMT, spot gold was up 0.8% at $ 1,778.76 an ounce, after hitting a session high of $ 1,784.26. Gold futures in the United States improved 1% to $ 1,783.

Gold gained attractiveness for buyers with other currencies as the dollar fell, affected by increasing bets of interest rate hikes in other markets.

A weaker dollar supports the gold metal, which remains “an interesting asset for investors looking to hedge against the risk of inflation getting out of control”Said Carlo Alberto De Casa of Kinesis Money.

Gold is often viewed as a hedge against inflation, although reduced stimulus and rate hikes often drive up government bond yields, increasing the opportunity cost of owning non-interest bearing bullion.

Yields on benchmark 10-year US Treasuries also fell.

In other precious metals, spot silver was up 3.1% to $ 23.88 an ounce, hitting a high in more than a month. Platinum was up 1.4% to $ 1,049.84 an ounce, and palladium was up 3.1% to $ 2,076.52.