2018.05.1402:04:00UTC+00Gold Prices Rise on U.S. Rate-Hike Expectations

Gold prices increased on Monday on the back of a subdued dollar as investors considered the prospects of fewer interest rate hikes in the United States this year.

Spot gold climbed 0.2 percent to $1,320.45 per ounce, after marking the highest since April 26 at $1,325.96 in the previous session.

U.S. gold futures for June delivery were little changed at $1,320.50 per ounce.

The dollar eased against a basket of six major currencies pulling back further from its 2018 peak hit last week on the back of dropping U.S. yields, after softer economic data last week curbed prospects of aggressive rate hikes in the United States.

St. Louis Federal Reserve Bank President James Bullard spelled out the case against any further interest rate increases, saying rates may already have reached a "neutral" level that is no longer stimulating the economy.

While gold prices are likely drawing some support from an ongoing rift between the United States and Iran, investors said easing U.S.- China trade concerns could add downside risks to prices.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.62 percent to 857.64 tonnes on Friday.

Speculators raised their net long position in COMEX gold contracts by 636 contracts to 52,621 in the week to May 8, U.S. Commodity Futures Trading Commission (CFTC) data

showed.

In other precious metals, silver climbed 0.6 percent at $16.71 an ounce, after reaching a 2-½-week high in the previous session.

Platinum was up 0.3 percent to $924.50 per ounce, having notched its peak since April 25 at $929.10 on Friday. Palladium was 0.1 percent lower at $994.70 per ounce, after reaching a 2-½ -week high at $1,008.50 on Friday.