Spot gold had gained 0.1% to US$1,322.41 (RM5,397) per ounce as of 0747 GMT. The metal touched US$1,325.30 (RM5,409) earlier, just below a 9-month peak of US$1,326.30 (RM5,414) an ounce marked on Jan. 31.
U.S. gold futures rose 0.3% to US$1,326.1 an ounce.
“Alleviation of risks around the trade talks has certainly benefited the markets,“ said ANZ analyst Daniel Hynes, adding that signs of progress in the discussions had reduced appetite for the dollar, which has been supporting gold.
The dollar was marginally weaker on Monday, as increasing expectations of a U.S.-Sino trade deal led investors to shift away from the safety of the greenback, which had been the preferred safe-haven during the trade dispute.
The United States and China will resume trade talks this week in Washington with time running short to ease their bruising trade war, but U.S. President Donald Trump repeated on Friday that he may extend a March 1 deadline for a deal and keep tariffs on Chinese goods from rising.
Spot gold prices have risen about 3.3% so far this year on hopes that the world’s two largest economies will hammer out a truce and on expectations the U.S. Federal Reserve will pause its cycle of interest rate hikes.
Minutes of the Fed’s January policy meeting are due on Wednesday and should provide more guidance on the likelihood or not for rate hikes this year.
“Looser monetary policies are generally favourable to gold, which has benefited since the Fed paused its tightening path,“ said Nicholas Frappell, global general manager, ABC Bullion.
“The market will be looking closely at U.S. and China data and I think gold will target a retest of the US$1,326 level again.”
However, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell to its lowest level this year at 793.03 tonnes on Friday.
Meanwhile, palladium hit a record high of US$1,449 (RM5,916) an ounce and stayed in a broad US$20 range in early trade. The metal was currently trading at $1,442 (RM5,887) an ounce, up 0.7%.
“In combination with supply-side issues, the (palladium) market is going to be in a sizeable deficit this year … potential for better-than-expected demand from China will exacerbate that tightness,“ ANZ’s Hynes added.
Platinum inched 0.2% higher to US$803.18 per ounce, having touched a near two-week high of US$807 earlier in the session. Silver was little changed at US$15.78. — Reuters
Source: The Sun Daily