Gold prices rallied over 1% on Monday as the U.S. dollar weakened and investors positioned themselves ahead of the Federal Reserve’s upcoming policy meeting and ongoing trade negotiations between the U.S. and China.
Market Optimism Returns After Tough Week
Spot gold climbed 1.8% to $3,298.09 an ounce, rebounding from its worst weekly performance since February. U.S. gold futures also gained nearly 2%, reaching $3,306.50. A weaker dollar, which dropped 0.3% against major currencies, contributed to the precious metal’s resurgence by making it cheaper for holders of other currencies.
“The U.S. dollar is slowing down and that is a positive for gold,” said Carlo Alberto De Casa, external analyst at Swissquote. He pointed to weaker-than-expected U.S. GDP data and recent developments in oil markets as catalysts for expectations that the Fed could soon cut interest rates.
Fed Decision in Focus
Although the Federal Reserve is widely expected to keep rates unchanged in its upcoming meeting, investors are looking for clarity on future monetary policy moves. Market attention will also be on updated economic projections and statements from Fed officials.
President Donald Trump, speaking ahead of the meeting, reiterated his belief that the Fed should reduce rates and confirmed he has no plans to replace Jerome Powell as Chairman before the end of his term in 2026.
Safe-Haven Appeal Remains Strong
Gold’s reputation as a hedge against uncertainty and inflation remains intact. The ongoing debate about U.S.-China trade, central bank policy, and global recession risk continues to drive interest in non-yielding assets like gold.
“Gold will continue outglittering silver,” wrote Goldman Sachs in a recent note, citing strong central bank purchases, slowing Chinese solar production, and continued economic headwinds as supportive factors.
Meanwhile, other precious metals also gained ground. Silver rose 1.2% to $32.37 per ounce, while platinum edged up to $961.35 and palladium rose 0.8% to $961.52.