Gold prices traded higher during Monday's Asian session, recovering from monthly lows near US$3,250 as persistent United States dollar weakness and renewed Federal Reserve rate cut bets offered support.
However, the recovery remains fragile amid lingering bearish technical signals and continued global uncertainty.
By 3:55 pm AEST (5:55 am GMT) spot gold was up $16.85 or 0.5% to US$3,291.09 per ounce.
At the start of the week, the U.S. Dollar remained under pressure, hovering near its lowest point since January 2022 last Friday. The decline was fuelled by dovish expectations for the Federal Reserve, concerns over the passage of President Donald Trump’s expansive spending bill, and renewed friction in trade negotiations with Japan.
Meanwhile, last Friday, Treasury Secretary Scott Bessent confirmed that issues over rare earth mineral shipments between the U.S. and China had been resolved.
Canada also moved to de-escalate tensions, with its finance ministry announcing it would withdraw a proposed digital services tax to help advance broader negotiations with Washington.
Meanwhile, the dovish tone around Fed policy has gained momentum, with investors increasingly expecting a rate cut as early as September. The shift has added to pressure on the U.S. dollar, providing room for gold to recover.
Despite the rebound, gold remains technically vulnerable. Traders will be closely watching commentary from several Federal Reserve officials scheduled for later Monday, as well as Tuesday’s U.S. job openings and labour turnover survey (JOLTs) report.
Markets will also focus on a major appearance by Fed Chair Jerome Powell, who is due to speak at the European Central Bank’s Forum on Central Banking in Sintra, Portugal, on Tuesday.
