As the prelude to a possible major storm, investors are taking a cautious yet hopeful stance as gold prices edged higher Monday. Bullion surged on the back of a softer U.S. dollar, with hopes that trade talks between the United States and China might tamp down tensions supporting precious-metal buyers. For many, gold remained a source of comfort during times of global turmoil, a safe haven when economic and geopolitical storm clouds were threatening.
Spot gold was up 0.3% at 3,317.97 per ounce by 1124 GMT, after touching its lowest since early June at 3,293.29 earlier in the session. U.S. gold futures, meanwhile, fell 0.2 percent to $3,338.70. The dollar fell 0.2 percent relative to a basket of other currencies, which makes gold cheaper and more attractive for international buyers.
This week, attention will be centered on the U.S.-China talks that are scheduled to take place in London and through which officials are hoping to draw up common ground and avert a further escalation of trade tensions between the top two economies in the world. “Trade tensions, geopolitical risks, elevated debt levels, and slow economic growth are still the main drivers supporting gold prices,” said UBS analyst Giovanni Staunovo. These factors should continue to be supportive of gold in the months to come.
Gold price movements were mixed over the past week, but the precious metal retained its ground as market sentiment fluctuated. The yellow metal managed to remain steady even after stronger-than-expected U.S. employment data dampened some expectations around Federal Reserve interest rate cuts. Investors have recalibrated their expectations, shifting from anticipating two rate cuts to just one, likely in October. Traders will be closely watching the upcoming U.S. Consumer Price Index (CPI) data due Wednesday, which could offer fresh clues about the Fed’s next move.
Meanwhile, platinum continued its stunning rally, adding 2.7% ($31) to reach $1,200.95, a price not seen since May 2021. Alexander Zumpfe at Heraeus Metals Germany attributed the strong showing by platinum to short supply, better industrial demand, and a tailwind from across the broader precious metals market. Silver also rallied and gained 0.9% to $36.27 an ounce, and palladium advanced 2.5 % to $1,072.96.