By Harshith Aranya
(Reuters) – Gold rose on Monday as the dollar eased, recouping initial declines following a steep drop in the previous week, with focus on the release of U.S. Federal Reserve minutes later this week.
Spot gold rose 0.3% to $1,949.09 per ounce by 0636 GMT.
Gold fell 4.5% last week in its biggest decline since March as investors reassessed positions after bullion retreated from a record peak of $2,072.50 scaled on Aug. 7. U.S. gold futures gained 0.5% at $1,958.90 per ounce.
Gold does not “seem ready to resume the selloff in earnest as traders wait for FOMC meeting minutes and the fate of U.S. fiscal stimulus negotiations,” said DailyFx currency strategist Ilya Spivak.
“Prices may need to reclaim a foothold above the $2,000/oz figure to suggest near-term selling pressure has been neutralized.”
Making gold more attractive for holders of other currencies, the dollar slipped as investors were relieved by a delay in the review of a U.S.-China trade pact.
While a rise in real U.S. bond yields and profit taking “stifled gold’s upward trajectory” somewhat, fundamentals look sound, said National Australia Bank economist John Sharma.
The minutes from the Fed’s last policy meeting are due on Wednesday, with focus on any hints of a possible change to its guidance at its next review in September.
“The document might suggest the Fed is not in a hurry to expand the monetary support toolkit for now,” DailyFx’s Spivak added.
“The sense of urgency could be reduced further if Democrats and Republicans manage to agree on another round of fiscal support.”
Gold has risen 28.4% so far this year as unprecedented global stimulus to ease the economic blow from the COVID-19 pandemic pushed investors to bullion as a hedge against inflation and currency debasement.
Silver rose 1.5% to $26.81 per ounce, platinum rose 2.1% to $955.54 per ounce and palladium gained 2.6% to $2,164.07 per ounce.
(Reporting by Harshith Aranya in Bengaluru; Editing by Subhranshu Sahu and Amy Caren Daniel)