Gold prices rebounded from a two-week low, lifted by a decline in the U.S. dollar and Treasury yields as markets awaited U.S. President Donald Trump’s talks with Ukrainian President Volodymyr Zelenskiy and European leaders on a potential Russia peace deal.
In Dubai, gold rates edged up, with 24-carat gold rising AED2.5 to AED404.75 and 22-carat gold gaining AED2.5 to AED374.75. Additionally, 21-carat gold gained AED2.25 to AED359.25, while 18-carat gold rose AED2.25 to AED308.
Globally, spot gold was up 0.64 percent to $3,356.33 as of 5:07 GMT, after hitting its lowest level since August 1. Meanwhile, U.S. gold futures for December delivery gained 0.60 percent to $3,402.90.
Trump-Zelenskiy meeting in focus
Gold prices started the session under pressure but managed to rebound, supported by a pullback in U.S. Treasury yields from Friday’s gains.
European leaders are expected to join Zelenskiy in talks with Trump. According to sources familiar with Moscow’s stance, peace proposals discussed by Russian President Vladimir Putin and Trump at their Alaska summit would see Russia give up small areas of occupied Ukraine in exchange for Kyiv giving up large sections of its eastern territory that Moscow has so far failed to seize.
Market action remains subdued with limited movement in either direction as investors brace for potentially eventful White House meetings this week, with Zelenskiy back in Washington.
At the same time, benchmark 10-year U.S. Treasury yields have retreated from their more than two-week highs. In addition, the U.S. dollar has declined, losing 0.02 percent to 97.83. A softer dollar makes gold prices more attractive for other currency holders.
Fed to deliver first rate cut of the year in September
Investors are also turning their attention to the Federal Reserve’s annual symposium in Jackson Hole, Wyoming. Economists expect that the Fed will deliver its first rate cut of the year in September, with the possibility of another by year-end. Lower interest rates typically benefit non-yielding assets like gold, which is viewed as a safe haven during times of uncertainty.
According to the CME Group’s FedWatch tool, traders are currently pricing an 84.8 percent chance of a 25-basis-point rate cut next month.
The recent increase in the U.S. producer price index raised doubts about how aggressively the Fed might cut rates this year. Meanwhile, U.S. consumer prices rose only slightly in July, supporting hopes for a Fed rate cut. However, the stronger-than-expected PPI reading has tempered expectations for an aggressive easing cycle, making a 50-basis-point reduction at the next meeting less likely.
Last week, St. Louis Fed President Alberto Musalem stated that a 50-basis-point rate cut in September is not justified, contrasting with Treasury Secretary Scott Bessent’s view that such a move is possible. Non-yielding gold tends to perform well when interest rates are lower.
Read| Key takeaways from Trump-Putin summit: What lies ahead for U.S.-Russia relations?Â
Other precious metals
As gold prices rose on Monday, the precious metals market witnessed upward movement. Spot silver gained 0.34 percent to $38.12, while platinum rose 0.36 percent to $1,340.32 and palladium gained 0.66 percent to $1,119.35. Meanwhile, copper gained 0.04 percent to $4.48.
