Prior to U.S.-China trade negotiations aimed at easing tensions, gold prices increased Monday thanks to a declining US dollar, while platinum continued to rise for a sixth consecutive session to reach a four-year high.
After falling earlier in the day to $3,293.29, its lowest level since June 2, spot gold rebounded 0.3% to $3,318.76 an ounce as of 1007 GMT. Bullion became more affordable for holders of other currencies as the dollar dropped 0.3% vs a basket of peers.
According to Giovanni Staunovo, a UBS analyst, investors are aware that the factors that influence gold, such as trade and geopolitical tensions, debt worries, and slow economic development, are still present and should continue to do so in the coming months.
US and Chinese officials will meet in London on Monday to diffuse the trade conflict between the two heavyweights. Investors have reduced their estimates for two rate cuts this year to one in October due to better-than-expected US non-farm payroll statistics.
The market will be watching the US CPI data, which is scheduled for release on Wednesday, for more hints about the Fed’s monetary policy direction. Gold, which is seen as a safe-haven investment in times of political and economic unpredictability, usually does well in an environment with low interest rates. According to official figures, China’s central bank increased its gold holdings in May for the seventh consecutive month.
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