Record high stock prices have limited bullion gains and set their first monthly decline since March.
Spot gold rose 0.4% to $ 1,971.90 an ounce by 12:10 pm ET, after hitting a two-week high of $ 1,976.05 at the start of the session. US gold futures on the Comex in New York rose 0.2% to $ 1980.20 an ounce.
The precious metal fell 0.2% in August, despite rising to a historic high of $ 2,072.90 at the start of the period.
“The dollar's weakening and anticipation of further weakening has resulted in a slight gain (in gold),” said Jeffrey Sica, founder of Circle Squared Alternative Investments. The US dollar fell to its lowest level since May 2018 against other major currencies.
Meanwhile, global stocks hovered around record highs as investors gambled on continued monetary support from the central bank to revive the global economy.
However, “there are serious concerns that the market (for stocks) may have expanded and that some profit-taking could occur, which could lead to a reverse look to gold,” Sica said.
Gold is up roughly 29% this year, fueled by growing economic uncertainty surrounding the covid-19 pandemic and the upcoming U.S. elections.
Last week, the US Federal Reserve said it would adopt an average inflation target, which means that rates are likely to remain low even if inflation rises slightly in the future, which could provide additional incentive for bullion.
