Gold prices held firm on Monday as investors adopted a cautious stance ahead of high-stakes trade discussions between the United States and China, scheduled to take place later in the day in London. Hopes that the talks might ease tensions between the world’s two largest economies helped buoy sentiment across precious metal markets.
As of 05:43 GMT, spot gold edged up 0.1% to $3,313.54 per ounce, while U.S. gold futures slipped 0.4% to $3,333.80.
The much-anticipated meeting will bring together three top aides of U.S. President Donald Trump and their Chinese counterparts in an effort to resolve a protracted trade dispute that has weighed heavily on global financial markets.
“Short-term traders do not want to take aggressive long positions right now ahead of the outcome of the U.S.-China talks,” said Kelvin Wong, Senior Market Analyst for Asia Pacific at OANDA. Wong noted that while an immediate removal of tariffs is unlikely, a reduction in their severity could ease business conditions and calm inflationary concerns. However, he added that the elevated cost of doing business in the U.S., combined with a widening federal budget deficit, may continue to fuel inflation pressures.
Technical Outlook and Economic Indicators
On the technical side, spot gold faces a key support level at $3,296, with a potential downside target of $3,262 if that threshold is breached, according to Reuters technical analyst Wang Tao.
Investor sentiment has also been influenced by recent U.S. economic data. Friday’s non-farm payroll report topped expectations, with stronger-than-forecast wage growth and a steady unemployment rate, prompting markets to dial back expectations for Federal Reserve rate cuts. Futures now reflect the possibility of only one rate cut this year, likely in October.
Market focus will now shift to U.S. Consumer Price Index (CPI) data due Wednesday, which could provide further guidance on the Fed’s monetary policy trajectory.
President Trump added to the mix by announcing that a decision on the next Federal Reserve chair is imminent, stating that a “good Fed chair” would pursue lower interest rates—comments likely to keep investors on edge.
Central Bank Buying and Precious Metals Update
Gold continues to attract central bank interest, with China’s central bank increasing its gold reserves in May for a seventh consecutive month, official data showed. Such sustained demand underscores gold’s appeal as a hedge amid currency volatility and geopolitical risk.
Other precious metals saw mixed movements:
Spot silver rose 0.2% to $36.03 per ounce
Platinum gained 1.6% to $1,187.80
Palladium slipped 0.1% to $1,045.61
With macroeconomic uncertainties persisting and key data releases ahead, analysts suggest that gold will remain a closely watched asset in the days to come.
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