Spot gold climbed 0.4% to $3,324.21 per ounce as of 11:20 a.m. ET, after briefly dipping below the $3,300 mark earlier in the session. U.S. gold futures, however, edged 0.1% lower to $3,343.40 per ounce. A softer U.S. dollar helped keep gold attractive to foreign buyers, lending support to prices.
Markets are closely watching the talks between Washington and Beijing, which resumed this week after the two sides agreed to a temporary pause in tensions last month. While signs of diplomatic progress could ease short-term safe-haven demand, analysts say broader macroeconomic forces remain favorable for gold.
“In the short term, if there is a positive outcome of the meeting, it could be a little negative for gold, but not too much,” said Bart Melek, head of commodity strategies at TD Securities, in a research note. “I think a weaker economy, likely interest rate cuts and lower momentum on the risk appetite side is getting people to move into gold. And, of course, expectations of higher inflation.”
CPI Report Looms Large
Investor attention is also turning to the upcoming U.S. Consumer Price Index (CPI) report, due Friday, which could shape expectations for Federal Reserve policy through the remainder of 2025. Softer inflation data could bolster the case for rate cuts, which tend to benefit gold as a non-yielding asset.
Strong Central Bank Demand Continues
Adding to the bullish case for gold, data released over the weekend showed that China’s central bank added to its gold reserves for a seventh consecutive month in May. The continued accumulation reflects broader central bank interest in diversifying away from the U.S. dollar, offering structural support to the gold market.
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