Gold reversed course and edged higher on Monday, supported by a weaker dollar, after earlier touching its lowest level in over a month. The bounce comes as easing trade tensions between the U.S. and China reduced safe-haven demand and boosted risk appetite.
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Spot gold rose 0.1% to $3,277.62 per ounce as of 04:21 GMT, after hitting its lowest since May 29 earlier in the session.
U.S. gold futures held steady at $3,288.90.
Tim Waterer, chief market analyst at KCM Trade, said:
"Expectations around tariff talks and developments in the Middle East seem less pessimistic, which is weakening gold’s appeal compared to riskier assets."
Asian stocks rose alongside gains in Wall Street futures, while the U.S. dollar index slipped 0.2%. A weaker dollar makes dollar-priced gold more affordable for holders of other currencies.
U.S. Treasury Secretary Scott Baisent said Friday that the U.S. and China had resolved issues over shipments of rare earth metals and magnets to the U.S., adding that the Trump administration’s various trade deals with other countries could be finalized by Labor Day on September 1.
Canada also scrapped its digital services tax targeting U.S. tech firms late Sunday—just hours before its implementation—in a bid to revive stalled trade negotiations with the U.S.
Meanwhile, the ceasefire between Iran and Israel, following a 12-day conflict, appears to be holding, further reducing safe-haven demand.
Although the dollar remains under pressure, which limits gold’s downside, the $3,250 level remains a key support zone. A break below that could accelerate losses toward $3,200, according to Waterer.
Generally, geopolitical and economic stability dampens demand for gold as a safe-haven asset, and rising interest rates reduce the appeal of non-yielding assets like gold.
Spot silver rose 0.5% to $36.14 per ounce.
Platinum climbed 1.9% to $1,364.74.
Palladium gained 1.5% to $1,150.50.
— (Agencies)
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