Gold prices firmed on Monday, helped by a weaker dollar, while investors awaited more clarity on trade policy between the U.S. and its trading partners, and looked forward to the Federal Reserve’s policy decision due later this week.
Spot gold gained 0.7% to $3,261.59 an ounce, as of 0217 GMT.
U.S. gold futures rose 0.8% to $3,269.60.
The dollar was down 0.3% against its rivals, making gold more attractive for other currency holders.
“The U.S. Dollar is looking subdued ahead of the Fed meeting this week which is enabling gold to take a mild run higher,” KCM Trade’s Chief Market Analyst Tim Waterer said.
“We may see gold continue to operate in the $3200-$3350 range ahead of the Fed meeting. However, any new headlines on the trade deal could cause volatility to tick up once again.”
The market’s focus will be on the U.S. central bank policy decision and speeches by several Fed officials due this week, for insights into future monetary policy trajectory.
Traders are now expecting 80 basis points of rate cuts this year starting in July, following the U.S. Labor Department’s report on Friday showing larger-than-expected job additions in April.
Non-yielding gold acts as a hedge against global uncertainty and inflation and tends to thrive in a low-interest-rate environment.
Gold prices continue to fall
U.S. President Donald Trump said he will not remove Jerome Powell as Fed Board Chairman before his term ends in May 2026, while reiterating his call for the Fed to cut interest rates.
Trump on Sunday said the U.S. was meeting with many countries, including China, on trade deals, and his main priority with China was to secure a fair trade deal.
Chinese markets are closed for the Labour Day holiday from May 1-5 and will resume trade on Tuesday, May 6.
Spot silver rose 0.1% to $31.99 an ounce, platinum fell 0.4% to $956.09 and palladium eased 0.1% to $952.63.
American Dollar Exchange Rate