Key points
Gold prices firmed on Monday as the dollar eased following U.S. President Joe Biden’s decision to withdraw from the 2024 presidential race. Investors turned to bullion as a hedge against an uncertain political and market outlook.
Picture: Gold rises against the dollar as seen on the VT Markets app.
Spot gold rose 0.2% to $2,405.40 per ounce as of 0510 GMT, while U.S. gold futures gained 0.3% to $2,407.20.
The prospect of rate cuts and political uncertainty in the United States are supporting gold prices. Conditions are in place for gold to see another record high before the end of 2024. Biden’s exit from the reelection race cleared the way for another Democrat to challenge Donald Trump, which led to the dollar easing and making bullion more attractive to buyers holding other currencies.
When accepting the Republican nomination on Thursday, Trump reiterated his promise to cut corporate taxes and interest rates. The Trump presidency is expected to lead to tougher trade relations, potentially resulting in inflationary tariffs. This geopolitical tension could further boost gold prices.
Gold hit an all-time high of $2,483.60 last week on increased chances of U.S. interest rate cuts this year, with markets pricing in a 97% chance of a cut in September.
Also read: Gold prices stay steady as optimism about U.S. rate cuts boosts the market
On the data front, the main focus this week will be on Friday’s U.S. personal consumption expenditures (PCE) figure. Other data to watch include July S&P Global flash PMIs, advance second-quarter GDP, and weekly jobless claims.
Among other metals, spot silver fell 0.5% to $29.11 per ounce, platinum slipped 0.3% to $959.99, while palladium rose 1.1% to $916.18.
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