Gold Holds Near Record High as Dollar Weakens

Spot gold prices edged higher on Monday, hovering near their record highs reached last week, Reuters reports. This upward momentum is attributed to a weakening US dollar and anticipation for key US inflation data due later this week.

Spot gold rose 0.1% to $2,939.15 an ounce by 0444 GMT, having reached an all-time high of $2,954.69 on Thursday. US gold futures traded flat at $2,953.

"Disappointing U.S. macro data at the tail end of last week has caught up with the dollar, which has opened the door higher for gold," said Tim Waterer, chief market analyst at KCM Trade, to Reuters. "With trade uncertainties not looking like they are disappearing anytime soon, gold could still be eyeing off reaching new all-time highs again this week."

Last week, US President Donald Trump threatened fresh tariffs, adding lumber and forest products to previously announced duties on imported cars, semiconductors, and pharmaceuticals. This uncertainty has contributed to a more favorable environment for gold.

Markets will now focus on Friday's release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation measure. This data will provide insights into the central bank's interest rate trajectory.

If inflationary pressures persist, prompting the Fed to keep rates elevated, gold's appeal as a non-yielding asset could diminish.

"To breach the $3,000 mark, gold needs a very strong reason as war premium seems to have waned a little, while other supporting factors supporting bullion are already discounted," said Ajay Kedia, director at Mumbai-based Kedia Commodities.

On the geopolitical front, Trump reversed course on Friday, acknowledging that Russia invaded Ukraine and stating that Kyiv would soon sign a minerals agreement with the US as part of efforts to end the war.