Gold gains on dollar weakness, safe-haven demand

Gold prices gained more than 2% on Monday, driven by a weaker dollar and safe-haven demand, while the market awaits a policy decision from the US Federal Reserve later in the week.

Spot gold was up 2.3% at USD 3,315.09 an ounce at 1:52 p.m. ET (1752 GMT).

US gold futures settled 2.4% higher at USD 3,322.3.

The dollar index fell 0.1%, making bullion less expensive for other currency holders.

US President Donald Trump announced on Sunday a 100% tariff on movies produced overseas, reigniting concerns about the potential fallout of a global trade war.

“We are seeing a continued flow of safe-haven demand, keeping gold prices elevated … prices are going to trade above USD 3,000 level at least in the near-term,” said Jim Wyckoff, senior analyst at Kitco Metals.

“I don’t think any change in interest rates is expected at this meeting, but we’ll be watching it to see if the Fed is leaning any particular way.”

Traders await Fed Chair Jerome Powell’s comments due on Wednesday to get clues on the central bank’s rate path. The Fed has held its policy rate in the 4.25%-4.50% range since December.

The Fed is expected to leave interest rates unchanged this meeting, but it may be the last where the outcome is so cut and dry with Trump’s tariffs casting a shadow of uncertainty over the economic outlook.

Gold, which is considered a hedge against uncertainty and tends to thrive in a low interest rate environment, has hit multiple record highs and gained over 26% so far this year.

Goldman Sachs expects gold to continue outperforming silver, but noted that, given the strong correlation in flows, renewed demand for gold in 2025 was likely to boost silver prices too.

Spot silver rose 1% to USD 32.31 an ounce.

Meanwhile, platinum fell 0.4% to USD 956.05 and palladium shed 1.5% to USD 939.55.

(Reporting by Sarah Qureshi and Ashitha Shivaprasad in Bengaluru; Editing by Shailesh Kuber)