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Gold rose more than 1.5% to a near one-week high on Monday, as expectations for rising inflation triggered equity valuation concerns and drove investors toward the safe-haven metal, while a weaker U.S. dollar lent further support.

Spot gold was up 1.5% at $1,808.16 an ounce by 1:46 p.m. EST (1846 GMT), after hitting its highest level since Feb. 16 in the session.

U.S. gold futures settled up 1.7% at $1,808.40.

"We are seeing investment flows into gold as market participants grow more anxious about rising real rates that can impact equity valuations," said TD Securities commodity strategist Daniel Ghali, pointing to rising Treasury yields.

U.S. benchmark 10-year treasury yields hit a near one-year high, increasing the opportunity cost of holding non-yielding bullion.

However, rising real yields and inflation concerns made equity valuations look more stretched in comparison and prompted investors toward safe-haven assets like gold, which is widely viewed as a hedge against inflation.

"The dollar at the moment is low and that is supporting. Also, the real reason for the gold prices to increase in the longer term is the chances of inflation picking up," Commerzbank analyst Eugen Weinberg said.

The dollar index fell 0.4% to a more than one-month low, making gold less expensive for holders of other currencies.

A $1.9 trillion U.S. stimulus package is widely expected to pass by the end of the week, raising hopes of a speedy economic recovery but at the cost of rising inflation.

Investors are also eyeing the testimony of U.S. Federal Reserve Chairman Jerome Powell on the Semiannual Monetary Report to Congress on Tuesday.

The Fed and other leading central banks have pinned their hopes on ultra-low interest rates to get the economy out of the economic fallout from the COVID-19 pandemic.

Elsewhere, silver rose 3% to $28.02 an ounce, its highest level since Feb.2. Platinum edged 0.1% higher to $1,274.80.

Palladium gained 0.4% to $2,388.70, after reaching a more than one-month high of $2,431.50.