Gold prices inched up on Monday, supported by a softer U.S. dollar, as traders closely monitored the ongoing trade discussions between the U.S. and China.
Spot gold climbed 0.6% to $3,329.70 an ounce by 11:28 a.m. ET (3:28 p.m. GMT), recovering from an earlier dip to a one-week low. U.S. gold futures also edged higher, gaining 0.2% to settle at $3,351.50.
The U.S. dollar index slipped by 0.2%, making dollar-denominated gold more affordable for buyers using other currencies.
Senior officials from the U.S. and China are holding talks in London aimed at resolving this year’s trade tensions, including tariffs and restrictions. A temporary truce agreed upon last month had already brought some relief to financial markets.
“In the short term, if there is a positive outcome of the meeting, it could be a little negative for gold, but not too much,” said Bart Melek, head of commodity strategies at TD Securities.
“I think a weaker economy, likely interest rate cuts and lower momentum on the risk appetite side is getting people to move into gold. And, of course expectations of higher inflation.”
Meanwhile, geopolitical tensions also lent support to gold, with Russia claiming further advances in Ukraine’s Dnipropetrovsk region. The Kremlin said the military action aimed to establish a “buffer zone.”
Gold, seen as a safe-haven asset, tends to attract investors during times of geopolitical strife and economic uncertainty. Its appeal also increases in low-interest-rate environments, as it doesn’t offer yields like other investments.
Investors are also awaiting the release of U.S. Consumer Price Index (CPI) data on Friday, which will help shape expectations for future Federal Reserve rate decisions.
In other precious metals, spot platinum surged nearly 4% to $1,215.31, reaching its highest level since May 2021. Silver rose 1.9% to $36.65 per ounce, and palladium jumped 3.5% to $1,084.17.
China’s central bank, meanwhile, added gold to its reserves in May for the seventh consecutive month, reflecting sustained demand.