Bullion traded near $3,325 an ounce, after the greenback tumbled against other major currencies amid speculation that progress on US trade deals could involve a recalibration of exchange rates. President Donald Trump has suggested his administration could strike agreements as soon as this week.
Trump’s aggressive trade policy has rattled markets, undermining the dollar’s traditional role as a haven, and leading investors to boost allocations away from US assets. That’s reinforced gold’s status as a safe asset, with a weaker greenback also making the metal cheaper for buyers in other currencies.
Gold has surged by more than a quarter this year, hitting a record just above $3,500 an ounce in April, before losing some ground in the last couple of weeks. The ascent has been driven by haven buying as the trade war unnerved investors, as well as by speculative demand in China and central-bank buying.
Elsewhere, investors are looking ahead to the Federal Reserve’s midweek interest-rate decision. Policymakers are widely expected to hold rates steady when they conclude their meeting on Wednesday, despite Trump ratcheting up pressure on Chair Jerome Powell to loosen. Lower borrowing costs tend to benefit bullion as it doesn’t pay interest.
Spot gold was 0.3% lower at $3,325.57 an ounce at 8:29 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat, after losing 0.3% in the previous session. Silver edged higher, while palladium and platinum were little changed.
