Investing.com - Gold prices rose to fresh 15-month highs on Monday boosted by continued weakness in the dollar, but trade volumes remained thin with many markets closed for the May Day holiday.
Gold futures for June delivery hit highs of $ 1,305.95 an ounce, the strongest level since January 2, 2015 and were last at $1,301.35.
The yen rose to fresh 18-month highs against the broadly weaker dollar on Monday amid the view that Japanese officials would not intervene in the foreign exchange market to weaken the currency.
The dollar dropped 4.5% against the yen last week, the worst weekly performance since the 2008 global financial crisis after the Bank of Japan held off from implementing fresh easing measures, defying market expectations for further stimulus.
The dollar remained under pressure after the Federal Reserve kept interest rates on hold last week and indicated that any future interest rate hikes would be data dependent.
Data on Thursday showed that the U.S. economy grew at the slowest rate in two years in the first quarter, with gross domestic product increasing just 0.5% form a year earlier.
Another report on Friday showed that both personal spending and the personal consumption expenditures price index, the Fed’s preferred inflation measure, ticked up 0.1% in March.
Lower interest rates tend to help gold, as the metal pays its holders nothing, but it struggles to compete with yield-bearing investments when interest rates rise.
Gold prices posted their strongest quarterly gains in 30 years in the first quarter of 2016 as global growth concerns and investor uneasiness about negative-interest-rate policies in Japan and Europe bolstered investor appetite for bullion.
Gold’s gains have slowed since then but the precious metal is still up almost 23% for the year to date.
Elsewhere in precious metals trading, silver for May delivery was at $17.92 an ounce and copper for July delivery was at $2.285 a pound.