Gold scales over 3-month high on virus worries, lower U.S. yields

Gold last traded at $1,866 an ounce. Silver at $28.21 an ounce.

NEWS SUMMARY: Precious metal prices shot up to 3-month highs on a variety of bullish factors amid ongoing dollar weakness. U.S. stocks fell, led by tech shares, after last week's hotter-than-expected inflation readings sparked a downturn in equity markets.

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....

'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 payroll report is helping to contain that fear,' Yang said.

The Fed has pledged to keep interest rates low until the economy reaches full employment, and inflation hits 2% and is on track to "moderately" exceed that level for some time.