SYDNEY: The United States dollar held broad gains in Asia on Monday as investors looked ahead to higher interest rates from the Federal Reserve, while gold slumped to five-year lows as a lack of global inflation left little to hedge against.

The precious metal ran into a wave of selling in Asia that drove it down 3.9 per cent to $1,089.80 an ounce, having already suffered its worst weekly performance since March last week.

Activity was light elsewhere with Japan on holiday and a dearth of major data in the diary, leading to a cautious start for stocks.

Australia's main index was a fraction softer, while MSCI's broadest index of Asia-Pacific shares outside Japan was all but flat.

There was better news from China where home prices rose for a second month in a row in June, suggesting government efforts to boost the struggling property sector have started to gain traction.

China stocks seem to have pulled out of their recent nosedive amid a barrage of measures from regulators and buying by brokerages and mutual funds.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.1pc, while the Shanghai Composite Index eased 0.2pc.

Greek banks are set to reopen on Monday after a three-week shutdown, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits.

With Greece fading from the limelight, markets focused on the relative outperformance of the US economy and nudged the euro near to its lowest in seven weeks at $1.0826.

A break of the May trough around $1.0818/19 would likely embolden bears to head for the April lows at $1.0521.

"For now, with an agreement on the cards and Greece currently adhering to creditors' demands, it appears markets can move on and focus on other things," say analysts at ANZ.

"Solid US data and further easing of global market stresses has driven expectations that the Fed could start to normalise rates this year."

That helped the dollar up to 124.13 yen, near its highest in around three weeks, while the dollar index of 97.991 is on ground last visited in April.

In commodity markets, oil was burdened by the prospect of increased exports from Iran now a deal has been struck to ease sanctions on the country.

Brent crude was off 15 cents on Monday at $56.95 a barrel, while US crude fell 9 cents to $50.80.

Read more: Gold slides to 8-month low