Gold Prices Rebound from One-Month Low as Dollar Weakens, Trade Hopes Rise

Gold prices ticked higher in Asian trade on Monday, recovering from a one-month low as a weaker U.S. dollar and renewed trade optimism buoyed investor sentiment. However, safe-haven demand remained limited, with geopolitical tensions in the Middle East showing signs of de-escalation.

Gold Rebounds After Weekly Rout

• Spot gold rose 0.5% to $3,290.25/oz

• Gold futures (August delivery) gained 0.4% to $3,300.00/oz by 02:00 ET (06:00 GMT)

The yellow metal had dropped nearly 3% last week—its steepest weekly decline since early May—as markets unwound safe-haven positions following a U.S.-brokered ceasefire between Israel and Iran.

Despite the recent recovery, gold prices remained flat month-to-date, as geopolitical-driven gains earlier in June were erased by selling pressure after the truce.

Ceasefire Cools Risk Premium

A phased ceasefire deal between Israel and Iran, brokered by President Donald Trump last week, sharply reduced geopolitical uncertainty. This muted safe-haven demand for gold, traditionally seen as a hedge during conflict.

While tensions had previously driven gold to multi-week highs, signs of regional stabilization have led traders to rotate back into risk assets like equities and cryptocurrencies.

U.S. Trade Deals Add Tailwind to Sentiment

Gold also found indirect support from rising optimism around global trade agreements:

• A U.S.-China trade pact, signed last week in Geneva, resolved critical disputes over rare-earth exports.

• A U.S.-U.K. deal took effect Monday, eliminating duties on aircraft parts and trimming car tariffs to 10%.

However, markets remain cautious ahead of the July 9 deadline, which could see the reinstatement of duties on other trade partners and the potential return of global tariffs on steel and aluminum.

Weak Dollar Lifts Bullion

Gold's rebound was largely underpinned by a sliding U.S. dollar, which boosts the appeal of dollar-denominated commodities for foreign investors.

• The U.S. Dollar Index (DXY) fell 0.2% in Asian trade, hovering near a three-year low.

• Bets are rising for a Federal Reserve rate cut by September, further weakening the greenback.

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Final Word

With rate cut bets mounting, a weaker dollar in play, and geopolitical risks in flux, gold remains in a tight tug-of-war. While Monday's gains offer relief from last week's slump, the next leg in price action will likely hinge on the Fed's July guidance, tariff developments, and trade diplomacy outcomes heading into mid-summer.