Mubasher: Gold prices recorded their highest level in more than two weeks on Monday, encouraged by weaker US dollar as the US and China are inching toward a broad trade deal.
At 7:50 am GMT, spot gold added 0.2% to $1,322.79 per ounce, while US gold futures grew 0.33% to $1,326.40 per ounce.
Meanwhile, palladium registered a record high of $1,449 an ounce and stayed in a broad $20 range in Monday early trade.
The markets have benefited from alleviation of risks over trade talks between the world’s two largest economies, ANZ analyst Daniel Hynes told Thomson Reuters.
Progress signs in Washington-Beijing discussions had slashed appetite for the greenback, which in return has been boosting the yellow metal, he added.
By 7:52 am GMT, the US dollar index, a gauge for the greenback against six major peers, went down 0.12% to 96.7830.
The US and China are to resume trade talks this week in Washington that will greatly ease their bruising trade dispute.
On Friday, US President Donald Trump reiterated that he might extend a 1 March deadline for a deal and halt further tariffs on Chinese goods.
Along with trade deal hopes, expectations that the US Federal Reserve will pause its cycle of interest rate increases have sustained spot gold prices, which rose around 3.3% so far this year.
The Fed will release minutes of its January policy meeting on Wednesday that will 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,” Nicholas Frappell, global general manager at ABC Bullion, said.
However, Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped to its lowest level this year at 793.03 tonnes on Friday.
“In combination with supply-side issues, the 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 down 0.1% to $801, touching a near two-week high of $807 an ounce earlier in the session, while silver upped 0.3% to $15.82 per ounce.