Gold prices surged more than 2% on Monday, recovering from their first back-to-back weekly loss of the year, as an uncertain economic outlook fueled safe-haven demand ahead of this week’s Federal Reserve rate decision.
Spot gold gained 2.3%, reaching $3,316.18 by 10:20 a.m. ET, nearly reversing the previous week’s losses. U.S. gold futures rose 2.6% to $3,328.80 per ounce in New York.
The U.S. dollar index dipped below the 100 mark, further boosting the appeal of gold.
“We are seeing continued safe-haven demand, keeping gold prices elevated … Prices are expected to remain above the $3,000 level in the near-term,” said Jim Wyckoff, senior analyst at Kitco Metals.
Traders are awaiting comments from Federal Reserve Chair Jerome Powell on Wednesday for insights into the central bank’s rate plans. The Fed has held its policy rate at 4.25% to 4.50% since December and is expected to keep rates unchanged in this meeting.
“I don’t think any change in interest rates is expected, but we’ll watch for any indication of the Fed’s future direction,” Wyckoff added.
Gold’s rally comes after U.S. President Donald Trump announced a 100% tariff on foreign-produced movies, raising concerns over a potential global trade war. Trump also confirmed that there are no scheduled talks with China this week, although he suggested a willingness to reduce tariffs on China “at some point.”
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