Gold surged more than 2% on Monday, reversing its recent downturn, as growing economic uncertainty and a weaker U.S. dollar boosted investor appetite for the safe-haven asset. The rally comes just days before the Federal Reserve’s next interest rate decision, which markets are watching closely.
Spot gold climbed 2.3% to US$3,316.18 by mid-morning in New York, recovering much of last week’s losses — its first back-to-back weekly decline this year. Meanwhile, U.S. gold futures jumped 2.6% to US$3,328.80 per ounce, as investors reposition ahead of key central bank commentary.
Weaker Dollar Lifts Bullion Demand
Supporting the rebound, the U.S. dollar index dipped below the 100 mark, making gold more attractive to non-dollar buyers and reaffirming its role as a hedge against currency volatility and macroeconomic risks.
According to Jim Wyckoff of Kitco Metals, “Safe-haven demand continues to flow into the gold market. Prices are likely to hold above the US$3,000 level in the near term as uncertainty persists.”
Fed Meeting in Focus
All eyes are now on the Federal Reserve’s policy announcement this Wednesday, with Fed Chair Jerome Powell expected to provide fresh clues on the outlook for interest rates. While the Fed is widely expected to keep rates unchanged at 4.25%–4.50%, investors will be watching closely for any shift in tone that could impact gold’s trajectory.
“There’s unlikely to be any rate change at this meeting,” Wyckoff noted, “but the market will be listening for any signs of future moves.”
Geopolitical Tensions Add Fuel
Gold’s rise also follows a weekend filled with geopolitical headlines. On Sunday, President Trump announced a 100% tariff on foreign films, raising concerns about escalating trade tensions. The move, though not directly linked to gold, sparked fears of broader global economic fallout — further boosting safe-haven demand.
Adding to the uncertainty, Trump confirmed there are no immediate trade talks planned with China, although he suggested tariff reductions may be considered “at some point” — leaving investors wary about where relations are headed.
Gold Outlook Remains Strong
With inflation concerns lingering, central banks holding off on rate cuts, and global trade risks back in focus, gold continues to shine as a defensive asset. Major analysts, including Goldman Sachs, maintain that gold is likely to outperform silver and other commodities in the current climate.
