Gold held firm on Monday, retaining gains from the previous session, as disappointing U.S. economic data hurt the dollar and bolstered the safe-haven appeal of the metal.
The dollar slid on Friday as data showed U.S. consumer sentiment unexpectedly fell in February from an 11-year high amid worries over slowing economic growth.
A weaker dollar makes gold cheaper for holders of other currencies, and also boosts bullion’s appeal as a hedge.
However, the outlook for the dollar remained upbeat despite the current pause in its long-term rally, as many investors continued to price in an interest rate hike by the Federal Reserve some time this year.
Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the U.S. economy, could hurt demand for bullion, a non-interest-bearing asset.