Gold prices climbed on Monday to their highest in more than a week, benefiting from a sliding dollar, although higher U.S. Treasury yields capped gains in greenback-priced bullion.

Spot gold rose 0.6% to $1,856.14 per ounce by 0814 GMT after prices hit their highest since May 12 at $1,858.21 earlier in the session. U.S. gold futures gained 0.7% to $1,855.60. "The jury is still out as to whether gold has weathered the storm in the medium term, or is (it) merely rallying in response to a sustained pullback by the U.S. dollar," OANDA senior analyst Jeffrey Halley said.

The dollar index slipped as investors kept up selling pressure, cutting bets on further dollar gains from rising U.S. rates, while turning hopeful that easing lockdowns in China can help global growth and exporters' currencies.

A weaker dollar makes bullion more attractive for overseas buyers. "Before turning structurally bullish, I would need to see gold hold onto its recent gains in the face of dollar strength, and not dollar weakness," Halley said. Benchmark U.S. 10-year Treasury yields firmed after a three-session losing streak, limiting demand for zero-yield gold.

St. Louis Federal Reserve Bank President James Bullard reiterated his view last week that the U.S. central bank ought to raise interest rates to 3.5% this year to get high inflation more quickly under control. Bullion tends to become less attractive to investors when U.S. interest rates are raised because it yields nothing.

It is, however, seen as a safe-haven asset during economic crises. "A deteriorating macro-economic outlook along with higher inflation should still be supportive for gold, and the rising risk of underperformance in equity markets has enhanced its risk-diversifier appeal," ANZ Research said in a note.

Spot silver gained 1.1% to $21.98 per ounce, platinum firmed 1% to $965.40, and palladium climbed 2.6% to $2,015.80.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Uttaresh.V and Subhranshu Sahu)