SINGAPORE: Gold prices climbed in Asian trade on Monday to hover near a 4-1/2-month high, supported by a weaker US dollar and growing inflationary pressure, while a slide in cryptocurrencies further lifted the safe-haven metal’s appeal.

Spot gold was up 0.2% at $1,883.12 per ounce by 0638 GMT. Last week, gold prices hit their highest level since Jan. 8 at $1,889.75.

US gold futures rose 0.4% to $1,883.40 per ounce.

“The US dollar index remains relatively weak and the manufacturing and service PMI’s from the United States and Europe actually raised the prospect of inflation in months to come,” Margaret Yang, a strategist at DailyFX said.

“Recent slide in cryptocurrencies also boosted the appeal of gold as an alternative investment asset. Gold’s upward momentum is very strong and it is likely to challenge a key psychological level at $1,900 in the days to come.”

Rising US inflationary risks have spooked markets after data showed a rise in consumer prices and pick-up in factory activity, lifting gold’s appeal as an inflation hedge.

Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.6% to 1,042.92 tonnes on Friday. Speculators raised their net long positions in COMEX gold in the week ended May 18.