Gold Rises on Lower Treasury Yields Amid Political Talks and Fed Meeting Anticipation
Gold prices posted a notable increase on Monday after falling earlier to their lowest level in two weeks, supported by a decline in U.S. Treasury yields and stronger demand for safe-haven assets amid political and economic uncertainty.
Spot gold rose 0.3% to $3,345.64 per ounce , after touching its lowest level since August 1. U.S. gold futures for December delivery also gained 0.3% to $3,391.80. According to Tim Waterer, chief market analyst at KCM Trade, the yellow metal came under pressure earlier in the session, but strong buying interest around the $3,330 level helped reverse the trend to the upside.
Political Watch
Investors are closely monitoring the upcoming meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky, alongside European leaders, to discuss peace proposals with Russia. Sources familiar with Moscow’s stance suggested that Russia may agree to withdraw from small pockets of territory it controls, in exchange for Kyiv relinquishing certain areas in eastern Ukraine that Russia has failed to capture. These developments, which stemmed from discussions during a summit between Presidents Putin and Trump in Alaska, have added further uncertainty to the geopolitical landscape, increasing gold’s appeal as a safe-haven asset.
Fed in Focus
On the economic front, attention is also centered on the U.S. Federal Reserve’s annual Jackson Hole symposium. A Reuters poll indicated that most economists expect the Fed to announce its first interest rate cut of the year in September, with a second reduction possible before the end of 2025, as the U.S. economy faces mounting challenges.
Gold is highly sensitive to interest rate policies; it tends to benefit from a lower-rate environment since it yields no return and becomes more attractive during times of economic uncertainty.
Other Precious Metals
In the broader precious metals market, silver edged up 0.3% to $38.08 per ounce, platinum gained 0.8% to $1,346.61, while palladium rose 1.3% to $1,126.85 per ounce.
