Gold Rises Supported by Decline in Yields and Anticipation of Peace Meetings
Gold prices saw a notable recovery at the close of trading on Monday, after touching their lowest levels in two weeks, supported by a decline in U.S. Treasury yields.
This rise comes as investors focus on the upcoming talks between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky, along with European leaders, to discuss ways to end the war with Russia.
The market is also keenly awaiting the annual Federal Reserve conference in Jackson Hole, Wyoming, which may provide important indicators regarding monetary policy.
In detail, gold rose in spot trading by 0.6% to reach $3355.84 per ounce, after having recorded its lowest level since August 1. In contrast, December gold futures saw a slight decline of 0.1% to settle at $3378 per ounce. The rise of the U.S. dollar by 0.3% also increased the cost of dollar-denominated gold for investors holding other currencies.
On the geopolitical front, President Trump announced that the United States would "help" Europe provide security for Ukraine as part of any agreement to end the war with Russia, during his surprise meeting with President Zelensky at the White House. In this context, European leaders joined the talks, amid reports suggesting that "Moscow may relinquish small pockets it controls in Ukraine in exchange for Kyiv conceding parts of its eastern territory," according to peace proposals discussed between Russian President Vladimir Putin and Trump during the Alaska summit.
Regarding monetary policy, most economists surveyed by Reuters expect the U.S. Federal Reserve to announce a rate cut in September, marking the first cut this year, with a second cut likely before the end of 2025. It is noted that gold, as a non-yielding asset, "is known to be a safe haven during periods of economic uncertainty and tends to rise in a low-interest-rate environment."
Alongside gold, other precious metals also performed positively, with silver rising in spot trading by 0.3% to $38.08 per ounce, while platinum increased by 0.8% to $1346.61, and palladium rose by 1.3% to $1126.85.
For his part, Tim Waterer, chief market analyst at KCM Trade, commented: "Gold was on a downward path at the beginning of the day, but it managed to reverse its direction after buyers pushed the price to around $3330."
While political developments and the direction of the U.S. Federal Reserve remain the main factors influencing gold prices, investors are awaiting the upcoming conference in Jackson Hole for further signals regarding U.S. monetary and economic policy.
