Gold prices rose on Monday as the dollar fell after US President Joe Biden’s decision to withdraw from the 2024 presidential race and traders turned to safe-haven gold in the face of uncertain prospects in politics and financial markets.
Spot gold rose 0.2% to $2,405.40 an ounce, while US gold futures rose 0.3% to $2,407.20, before paring gains slightly later. Gold was trading at $2,403 an ounce at the time of writing.
The potential for interest rate cuts and political uncertainty in the United States are supporting gold prices, and the conditions are in place for gold to achieve another record high before the end of 2024, said Kyle Rodda, a financial markets analyst at Capital.com.
The dollar fell in an initial reaction to US President Joe Biden abandoning his re-election bid, paving the way for another Democratic candidate to challenge Donald Trump.
The weaker dollar makes the metal more attractive to buyers holding other currencies.
When accepting the Republican nomination, Trump reiterated his promise to cut corporate taxes and interest rates.
Analysts also expect Trump’s return to the White House to tighten trade relations.
Gold hit an all-time high of $2,483.60 last week, amid growing chances of a U.S. interest rate cut this year.
On the data front, the main focus this week will be on the US personal consumption expenditures data due on Friday and other data, including the S&P Global Purchasing Managers’ Indexes for July, second-quarter GDP and then weekly jobless claims data.
As for other metals:
- Spot silver fell 0.5% to $29.11 an ounce.
- Platinum fell 0.3% to around $960.
- Palladium rose 1.1% to $916.18.
