According to Reuters, gold prices increased on Monday due to a weakening of the USD, while the delay in the peace process in Ukraine and concerns about US tariff policies increased safe-haven demand for precious metals.
Spot gold prices rose 0.1% to $2,860.25 an ounce at 7:05 a.m. GMT. US gold futures increased by 0.8% to $2,872/ounce.
The USD Index (DXY) fell 0.3% from its more than two-week high in the previous session, making gold cheaper for holders of other currencies.
Golds upward momentum at the start of todays Asia session could be driven by geopolitical risks as the expected peace deal between Ukraine and Russia continues to be delayed, Kelvin Wong, senior market analyst for the Asia-Pacific region at OANDA, said.
The meeting between Ukrainian President Volodymyr Zelenskiy and US President Donald Trump on Friday ended in failure, adding to the uncertainty in the financial market that had been shaken by weak economic data and fluctuations around US trade policy.
US Secretary of Commerce Howard Lutnick said on Sunday that tariffs on Canada and Mexico will take effect on Tuesday, but Donald Trump will decide whether to keep the planned 25% or not.
The US president also announced that he would impose an additional 10% tax on Chinese goods on Tuesday, doubling the 10% tax rate applied since February 4.
Data released on Friday showed that US consumer spending unexpectedly decreased in January. However, rising inflation could be a reason for the Federal Reserve to delay interest rate cuts in the coming time.
Although gold is considered a safe haven asset in the context of geopolitical instability, the attractiveness of this precious metal may decline when interest rates are high.
Among other metals, spot platinum fell 0.3% to $945.25 an ounce, while Paladi rose 0.4% to $923 an ounce.
Analysts say demand for platinum and Paladium - two precious metals used in industry - could decrease if Donald Trump's tariffs on US auto imports weaken car sales.
Spot silver prices fell 0.1% to $11.13 an ounce.
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