The price of gold in May is on track for its biggest monthly increase since July 2020 as the U.S. dollar heads for a second month of decline and fears of inflation grow around the world.
The price of spot gold was up 0.1% to $1,904.34 U.S. per ounce on May 31, while U.S. gold futures rose 0.2% to $1,909.00. Spot prices have risen 7.7% in the month of May.
Many analysts now forecast that the price of gold will exceed $2,000 an ounce in coming weeks.
Meanwhile, the U.S. dollar index was headed for its second straight monthly decline versus rivals, and the U.S. 10-year Treasury yield fell to 1.593%, reducing the opportunity cost of holding non-interest-bearing gold.
Data last Friday (May 28) showed inflation surged in April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target and posting its largest annual gain since 1992.
Gold is often seen as an inflation hedge, although U.S. Federal Reserve Chairman Jerome Powell has repeatedly stated that higher inflation will be transitory.
Investors’ focus this week will be on U.S. payrolls data to be released on June 4, with median forecasts suggesting they will show an increase of 650,000 jobs.
Separately, the price of silver gained 0.3% on May 31 to $27.96 and was heading for its largest monthly gain since December 2020.
