Gold prices rose over 2% on Monday 鈥� rebounding from the first back-to-back weekly loss this year 鈥� as an uncertain economic outlook drove up safe-haven demand ahead of this week鈥檚 Federal Reserve rate decision.
Spot gold gained 2.3% to $3,316.18 by 10:20 a.m. ET, erasing most of its losses from the previous week. US gold futures also surged 2.6% to $3,328.80 per ounce in New York.
The US dollar index, meanwhile, dropped below the 100 level once again, further strengthening bullion鈥檚 appeal.
鈥淲e are seeing a continued flow of safe-haven demand, keeping gold prices elevated 鈥� Prices are going to trade above $3,000 level at least in the near-term,鈥� Jim Wyckoff, senior analyst at Kitco Metals, told Reuters.
Traders now await Federal Reserve Chair聽Jerome Powell鈥檚聽comments due on Wednesday to get clues on the central bank鈥檚 rate path. The Fed has held its policy rate in the 4.25%-4.50% range since December and is widely expected to hold rates steady in this meeting.
鈥淚 don鈥檛 think any change in interest rates is expected at this meeting but we鈥檒l be watching it to see if the Fed is leaning any particular way,鈥� Wyckoff said.
Gold鈥檚 rally follows US President Donald Trump鈥檚 announcement on Sunday of a 100% tariff聽on foreign movies, a curious move that raised concerns about the potential fallout of a global trade war.
Also on Sunday, the Trump confirmed to media outlets that there are no talks planned with China in the upcoming week, but indicated that he is willing to lower tariffs on its economic rival 鈥渁t some point.鈥�
(With files from Reuters)