Gold prices rose on Monday, supported by a weaker dollar, as investors awaited further details on U.S.-China trade relations, along with a Federal Reserve policy meeting later this week.

Spot gold was up 0.5% at $3,256.85 an ounce, by 0416 GMT. U.S. gold futures were up 0.7% at $3,265.10.

The dollar (.DXY), opens in a new tab, fell 0.3% against a basket of currencies, making gold more attractive to holders of other currencies.

"The U.S. dollar appears to be weakening ahead of this week's Fed meeting, which could allow gold to gain a bit," said Tim Waterer, chief market analyst at KCM Trade. "We may see gold continue to operate in the $3,200-$3,350 range ahead of the Fed meeting. However, any fresh headlines on the trade deal could cause volatility to increase once again." Market focus will be on the US central bank's policy decision and speeches by several Fed officials due this week for insight into the future trajectory of monetary policy.

Traders now expect an 80 basis point interest rate cut this year starting in July, following a report by the US Labor Department on Friday that showed stronger-than-expected job gains in April.

Non-yielding gold acts as a hedge against global uncertainty and inflation and tends to thrive in a low-interest rate environment.

US President Donald Trump said he will not remove Jerome Powell as Fed Chairman before his term ends in May 2026, while reiterating his call for the Fed to cut interest rates. Trump said on Sunday the US was meeting with many countries, including China, to discuss a trade deal, and his top priority with China was to secure a fair trade deal.

Chinese markets are closed for the Labor Day holiday from May 1-5 and will reopen on Tuesday, May 6. Spot silver rose 0.5% to $32.14 an ounce, platinum fell 0.2% to $957.77, and palladium rose 0.2% to $955.28. (Newsmaker23)

Source: Reuters