Gold prices edged higher on Monday (August 18th), boosted by lower US Treasury yields, as market participants awaited US President Donald Trump's meetings with Ukrainian President Volodymyr Zelenskiy and European leaders later in the day.
Spot gold rose 0.4% to $3,348.28 an ounce, as of 08:40 GMT on Monday, after hitting its lowest level since August 1st. US gold futures for December delivery rose 0.3% to $3,393.40.
"Gold prices are rallying again today, with the market approaching the $3,350 level (as) the combination of weak yields and a weaker dollar is certainly a breath of fresh air for gold," said independent analyst Ross Norman. The benchmark 10-year US Treasury yield has fallen from a more than two-week high.
On the geopolitical front, European leaders will join Zelenskiy for talks with Trump on Monday evening to discuss ways to move forward with a possible deal to end the war between Russia and Ukraine.
Russia would cede a small portion of occupied Ukrainian territory, while Kyiv would cede a large portion of its eastern territory that Moscow cannot seize, under a peace proposal discussed by Russia's Vladimir Putin and Trump at their summit in Alaska on Friday, according to sources familiar with Moscow's thinking.
"It's unwise to be on the forefront of geopolitical news right now given that almost any outcome is possible. If there's a sense that tensions in Ukraine are easing, then we might expect some weakness in gold prices," Norman added. Investors are also looking ahead to the Federal Reserve's annual symposium in Jackson Hole, Wyoming, for more clues on the Fed's interest rate direction.
Economists polled by Reuters largely expect the Fed to announce a rate cut in September, its first this year, with a second cut likely by the end of the year. Non-yielding bullion, considered a safe haven during periods of geopolitical and economic uncertainty, tends to perform well in low interest rates.
Elsewhere, spot silver rose 0.2% to $38.08 an ounce, platinum was steady at $1,335.06, and palladium rose 0.6% to $1,118.92. (alg)
Source: Reuters
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