Gold prices steadied on Monday, following two sessions of losses, as markets turned their attention to a new round of U.S.-China trade negotiations. A weaker U.S. dollar and continued demand from central banks also helped support the precious metal, which remains a key safe-haven asset amid global uncertainty.
U.S. gold futures edged down just 0.15% to around $3,342 an ounce, a modest decline compared to last week’s nearly 2% drop. The dollar slipped 0.35% against a basket of major currencies, making gold more attractive for foreign buyers and helping to limit further downside in bullion.
Traders are now closely watching the outcome of high-level trade talks between Washington and Beijing, taking place in London. The discussions are seen as a potential step toward easing tensions between the world’s two largest economies. The recent expansion of the dispute - beyond tariffs to include export controls on key technologies - has increased pressure on both sides and raised fears about supply chain disruptions.
Gold, which typically performs well during times of economic and geopolitical stress, has been further supported by the prospect of continued central bank demand. The People’s Bank of China added to its reserves in May for the seventh consecutive month, according to official data released over the weekend.
Stronger-than-expected U.S. jobs data last week prompted investors to scale back their expectations for Federal Reserve rate cuts, now pricing in only one potential reduction this year, possibly in October. However, market focus is shifting to Wednesday’s consumer price index (CPI) report, which could offer fresh clues about the Fed’s next move on interest rates.