Gold bullion advances on weaker US dollar and Middle East conflict

GOLD prices hit their highest in almost a week on Monday as the US dollar retreated slightly and conflict in the Middle East buoyed bullion’s safe-haven appeal.

Spot gold was up 0.1% at $2,015.49 an ounce by 10:55 a.m. ET (1555 GMT) at its highest since Feb. 13.

US gold futures rose 0.1% to $2,026.90. Trading is expected to be thin with most US markets closed for the President’s Day holiday.

“Gold is taking benefits from the slide in the US dollar and also the new escalation of tensions in the Middle East,” said Carlo Alberto De Casa, market analyst at Kinesis Money.

Israel expects to continue full-scale military operations in Gaza for another 6-8 weeks as it prepares to mount a ground invasion of the enclave’s southernmost city, Rafah, four officials familiar with the strategy said.

A UK-registered cargo ship reported coming under attack in the Bab al-Mandab Strait off Yemen on Sunday and the UK Maritime Trade Operations agency reported crew abandoning ship off Yemen after an explosion.

The dollar index was down about 0.1%. A weaker US currency makes dollar-priced metals cheaper for buyers holding other currencies.

All eyes will be on the minutes from the Fed’s January policy meeting, due on Wednesday, for more clues on the timing of cuts to interest rates, which would decrease the opportunity cost of holding bullion.

Markets are pricing in a 74% chance of a cut in June, according to the CME Fed Watch tool.

In other precious metals, spot platinum was down 0.8% to $898.41 an ounce; palladium fell 1% to $940.05; and silver retreated by 1.9% to $22.95.