May 17 (Reuters) - Gold prices rose on Monday to their highest level in more than three months, as a dip in U.S. Treasury yields and worries over surging COVID-19 cases in some Asian countries boosted demand for the safe-haven metal.
Spot gold was up 0.6% at $1,854 per ounce by 0649 GMT, after hitting its highest since Feb. 2 earlier in the session. U.S. gold futures jumped 0.8% to $1,853.20.
“Treasury yields are falling and on the other hand, there seems to be fears about virus resurgence in Singapore, Taiwan and broader Asian-Pacific markets... driving up demand for safety,” said Margaret Yang, a strategist at DailyFX.
Benchmark U.S. 10-year Treasury yields slipped to their lowest in nearly a week, reducing the opportunity cost of holding non-interest bearing gold.
Singapore will shut most schools from Wednesday after the city-state reported the highest number of local COVID-19 infections in months, while Taiwan imposed new curbs on gatherings and movement.
In India, the world’s second-worst pandemic-hit country after the United States, the tally of coronavirus infections reached nearly 24.7 million on Sunday.
Investors now await minutes of the U.S. Federal Reserve’s last meeting due on Wednesday for more cues on the central bank’s monetary policy and any comments on rising inflation.
“Inflation is going to be a strong driver behind gold in the short- and medium-term. There are always concerns about Fed tapering, but the latest non-farm payrolls report is helping to contain that fear,” Yang said.
Gold is seen as a hedge against rising inflation.
Spot gold may rise to $1,876 per ounce, as it has broken a resistance at $1,847, according to Reuters technical analyst Wang Tao.
Elsewhere, silver was up 1% at $27.70 per ounce, after hitting a one-week high earlier in the day. Platinum gained 0.5% to $1,231.51 and palladium edged 0.1% higher to $2,895.61.
Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips