Gold prices rose Monday, with the precious metal following their strongest weekly advance since late April as the dollar continued to push lower against the yen. Gold for August delivery picked up $6.20, or 0.5%, to $1,392 in electronic trading. Trading on the Comex division of the New York Mercantile Exchange will reopen Tuesday, following Monday's U.S. Memorial Day holiday. Prices on Friday finished with a modest decline of 0.4%. However, they managed to log a weekly win of about 1.6%, the best weekly performance since the week that ended April 26. “Gold has remained well supported in light of Wednesday's Federal Reserve meeting minutes and [Federal Reserve Chairman] Ben Bernanke's testimony to Congress," said Rivkin global analyst Tim Radford in a note Sunday. Last week, Bernanke said the Fed may wind down the pace of bond purchases in the “next few meetings," adding that a decision would depend on economic data. But premature tightening of Fed policy “would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," he warned. Easy monetary policy tends to pressure the dollar and can lead to inflation. Gold can benefit from that as it's often seen as a hedge against inflation. A weaker greenback also makes gold and other dollar-denominated commodities less expensive for holders of other currencies to buy. The dollar lost about 1.7% against the yen last week, the steepest loss since early June amid concerns about volatility in Japanese bonds and a selloff in Japan stocks driving up the Asian currency. On Monday, the dollar bought 101.06 yen, down slightly from ¥101.09 on Friday. Meanwhile, minutes from the Fed's latest policy-setting meeting showed some Fed officials were willing to slow the pace of bond purchases as soon as the next meeting in June. Investors have also sought “gold as a safe-haven alternative," as Japanese stocks have sold off and as volatility in the Japanese bond market has risen, said Radford. Separately, the International Monetary Fund on Monday said Russia, Kazakhstan and Azerbaijan increased their gold reserves last month. In other action in electronic trade Monday, July silver rose 13 cents to $22.63 an ounce, stretching last week's rise of 0.6%. July copper was up less than 1 cent at $3.30 a pound. June palladium futures rose $5.95, or 0.8%, to $732.40 an ounce, and July platinum climbed $10.60, or 0.7%, to $1,462.50 an ounce. Marketwatch
