Gold prices surged over 2% as risk aversion and a weaker dollar helped drive the increase.

On Monday, gold prices surged as investors flocked to safe-haven assets like gold amidst rising global economic and geopolitical risks. Spot gold rose by 2.3%, reaching $3315.09 per ounce, while U.S. gold futures increased by 2.4%, ending at $3322.3 per ounce, setting a new high for recent months.

This rebound in gold prices was primarily supported by a weaker dollar and increased demand for safe havens. Recently, U.S. President Trump announced a 100% tariff on films made overseas, sparking fears of a new round of trade wars in global markets, thereby heightening investors' safe-haven sentiment and driving them towards gold.

Jim Wyckoff, a senior analyst at Kitco Metals, pointed out that "Safe-haven buying continues to support gold prices, which are currently stabilizing above $3000 per ounce. Even if the Federal Reserve does not adjust rates this week, the market will closely monitor its monetary policy stance to gauge future directions."

Another market focus this week is undoubtedly the Federal Reserve's upcoming rate decision. Since December last year, the Fed has kept the benchmark rate unchanged in the 4.25%-4.50% range. Although the market widely expects this meeting to maintain the status quo, the uncertainty about policy direction is increasing amidst Trump's new surge of trade protectionism.

Industry analysts believe the Fed might use this meeting to express its views on the economic outlook, and its wording will significantly impact the prices of gold and other precious metals. Generally, lower interest rates are favorable for gold because its non-yielding nature becomes relatively more attractive in a low-rate environment. Notably, gold has already risen by over 26% this year, repeatedly setting historical highs.

Apart from gold, other precious metals markets showed mixed performances. Spot silver rose by 1% to $32.31 per ounce. In its latest report, Goldman Sachs indicated that although gold will continue to outperform silver, the silver market might also be boosted as the demand for gold picks up.

In contrast, platinum and palladium saw a pullback, with platinum down 0.4% to $956.05, and palladium declining by a more substantial 1.5%, closing at $939.55.

Overall, as the market awaits Federal Reserve Chairman Powell's speech on Wednesday, the precious metals market is experiencing increased volatility due to various influencing factors. Investors will continue to assess global policy trends and their profound impact on the economy and the market.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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