May 5(Reuters) – Gold prices gained over 2% on Monday, driven by a weaker dollar and safe-haven demand, while the market awaits a policy decision from the U.S. Federal Reserve later in the week.
Spot gold was up 2.3% to $3,315.62 an ounce at 9:44 ET (1344 GMT). U.S. gold futures were up 2.5% to $3,324.50.
The dollar index (.DXY), fell 0.5%, making bullion less expensive to other currency holders.
U.S. President Donald Trump announced on Sunday a 100% tariff on movies produced overseas, reigniting concerns about the potential fallout of a global trade war.
“We are seeing a continued flow of safe-haven demand, keeping gold prices elevated … Prices are going to trade above $3,000 level at least in the near-term,” said Jim Wyckoff, senior analyst at Kitco Metals.
“I don’t think any change in interest rates is expected at this meeting but we’ll be watching it to see if the Fed is leaning any particular way.”
Traders await Fed Chair Jerome Powell’s comments due on Wednesday to get clues on the central bank’s rate path. The Fed has held its policy rate in the 4.25%-4.50% range since December.
The Fed is expected to leave interest rates unchanged this meeting, but it may be the last where the outcome is so cut and dry with Trump’s tariffs casting a shadow of uncertainty over the economic outlook.
Gold, which is considered a hedge against uncertainty and tends to thrive in a low interest rate environment, has hit multiple record highs and gained 26.3% so far this year.
Goldman Sachs expects gold to continue outperforming silver but noted that, given the strong correlation in flows, renewed demand for gold in 2025 was likely to boost silver prices too.
Spot silver rose 1.3% to $32.39 an ounce.
Platinum added 0.4% to $963.76. Meanwhile, palladium shed 0.7% to $947.15.
(This story has been refiled to correct the day of week to Monday, not Friday, in paragraph 1)
Reporting by Sarah Qureshi and Ashitha Shivaprasad in Bengaluru. Editing by Mark Potter
Disclaimer:Â The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
