Gold Prices Rise as Weaker US Dollar Offsets Federal Reserve Rate Concerns
Gold prices advanced on Monday, supported by a weaker US dollar after crude oil prices plunged amid easing geopolitical tensions in the Middle East. However, investors remained cautious ahead of a busy week of key US economic data that could shape the Federal Reserve's next monetary policy decision.
As of 08:43 WIB (0143 GMT), spot gold (XAU/USD) climbed 0.5% to $4,062.41 per ounce, while Gold Futures gained 0.3% to $4,117.35. Meanwhile, silver (XAG/USD) rose 0.6% to $57.98 per ounce, and platinum (XPT/USD) edged 0.3% higher to $1,650.18 per ounce.
Falling Oil Prices and Weak US Dollar Support Gold
Gold benefited after US President Donald Trump stated that Iran and several Middle Eastern countries requested additional time to finalize an agreement that could reopen the Strait of Hormuz and ease concerns over Tehran's nuclear program. The announcement reduced market expectations of an immediate escalation in regional tensions.
The comments triggered a sharp decline in crude oil prices, with oil falling more than $5 per barrel during early Asian trading. Lower energy prices eased fears of prolonged supply disruptions that could fuel inflation and strengthen the case for more aggressive monetary tightening.
At the same time, the US Dollar Index (DXY) remained under pressure, slipping below the 100.00 level to around 99.7. A weaker dollar makes gold more affordable for overseas buyers, increasing demand for the precious metal and providing additional upside momentum.