Spot gold prices inched higher on Monday as the U.S. dollar softened, and investors prepared for the Federal Reserve’s policy meeting this week, Reuters reported.
The United States’ central bank is widely expected to announce its third interest rate cut, in conjunction with an updated economic outlook for 2025.
“The continuous presence of geopolitical risks is contributing to gold’s strength,” Nitesh Shah, a commodity strategist at WisdomTree, told Reuters. He pointed to ongoing tensions in the Middle East, particularly Israel’s decision to invade the Golan Heights following the fall of Bashar Al Assad last week.
Shah also noted that China’s renewed gold buying is boosting prices. “China appears ready to ramp up policy stimulus to revive its economy, and that would further support gold,” he said. As the world’s largest consumer of gold, increased buying by China typically bolsters global demand.
Markets now anticipate a quarter-point rate cut from the Federal Reserve during its two-day meeting that starts Tuesday.