Gold rebounds from one-month low as dollar weakens and trade optimism rises

Gold prices edged higher on Monday after slipping to their lowest level in more than a month, supported by a weakening U.S. dollar and easing geopolitical tensions that have tempered safe-haven demand.

Spot gold rose 0.5% to $3,290 per ounce by 06:13 GMT, recovering from its lowest point since 29 May earlier in the session. U.S. gold futures also gained 0.4%, reaching $3,301.

Market sentiment was buoyed by easing trade friction between the U.S. and China, as well as improving geopolitical conditions. This shift boosted risk appetite and lifted global equities, while weighing on the dollar, which fell 0.3%. A softer dollar typically supports gold by making it cheaper for buyers using other currencies.

“There is less of a ‘doom and gloom’ outlook surrounding both tariff talks and events in the Middle East, which is relegating gold to play second fiddle to risk assets,” said Tim Waterer, Chief Market Analyst at KCM Trade.

Asian stock markets strengthened, and Wall Street futures pointed higher as traders responded to diplomatic progress. U.S. Treasury Secretary Scott Bessent on Friday cited key breakthroughs in negotiations over rare earth shipments from China and said several trade deals could be finalized by the 1 September Labor Day deadline.

In a related development, Canada rescinded its planned digital services tax on U.S. tech companies just hours before implementation, a move aimed at reviving stalled trade talks with Washington.

Meanwhile, a ceasefire between Iran and Israel appeared to be holding after 12 days of conflict, contributing to the broader decline in safe-haven demand.

Waterer noted that while gold found support from a weakening dollar, the $3,250 level remains a key technical threshold.

“Any breach of this level could see losses accelerate towards the $3,200 level,” he added.

Gold’s performance continues to be weighed by stable global conditions and a high-interest-rate environment, which dulls the appeal of non-yielding assets like bullion.

In other precious metals, spot silver gained 0.5% to $36.16 per ounce, platinum rose 2% to $1,366.63, and palladium increased 1.6% to $1,151.36.

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