Gold prices remain steady below the historic US$3,005 mark reached last Friday, as market sentiment supports the metal amid ongoing geopolitical tensions and expectations surrounding the United States Federal Reserve's policy stance.
By 3:55 pm AEDT (4:55 am GMT) spot gold prices were down $1.45 or 0.1% at US$2,983.22 per ounce.
The precious metal continues to benefit from its safe-haven appeal, with concerns over global trade dynamics, escalating tensions in the Middle East, and the likelihood of further monetary easing from the Fed weighing on the U.S. dollar.
Over the weekend, geopolitical risks intensified after the U.S. launched large-scale airstrikes on Yemen, targeting Iran-backed Houthi militants.
In retaliation, the Houthis attacked U.S. vessels in the Red Sea. U.S. President Donald Trump issued a stern warning on Truth Social, stating that "hell will rain down" on the Houthis if hostilities persist.
Meanwhile, diplomatic developments remain in focus as Trump’s envoy Steve Witkoff indicated that the U.S. President is expected to hold discussions with Russian President Vladimir Putin this week, following the Kremlin’s endorsement of a 30-day ceasefire in Ukraine.
Further supporting gold prices, China introduced new measures on Sunday aimed at boosting domestic consumption and raising household incomes.
As the world's largest gold consumer, China's economic stimulus efforts and its latest economic data, which showed largely positive activity in January and February, have contributed to maintaining demand for the metal.
Looking ahead, traders are closely watching the upcoming U.S. retail sales data for insights into consumer spending trends, which could influence expectations for the Fed’s monetary policy.
Additionally, Wednesday’s Federal Reserve policy decision and updated economic projections will be key drivers for gold’s next move.
