Gold prices edged higher on Monday, rising towards their best level since April as the U.S. dollar weakened on hopes the U.S. and China would hammer out an agreement resolving their protracted trade war.
Comex gold futures were up $2.25, or around 0.2%, at $1,329.95 a troy ounce by 8:40AM ET (13:40 GMT), not far from a 10-month high of $1,331.10.
Meanwhile, spot gold was trading at $1,326.91 per ounce, up $5.50, or roughly 0.4%.
There will be no floor trading on the Comex on Monday because of Washington's Birthday, more widely known as Presidents Day. All electronic transactions will be booked with Tuesday's trades for settlement.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, dipped 0.2% to 96.54, well off a 2019 high of 97.23 reached on Friday.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Markets will be keeping abreast of the next round of trade discussions between the U.S. and China in Washington this week, as the two sides race to reach a deal that would avert a tariff increase on Chinese goods by March 1.
U.S. tariffs on $200 billion in imports from China are set to rise to 25% from 10% if no deal is reached by March 1, but U.S. President Donald Trump said that he may extend the deadline if the two sides were close to an agreement.
Investors will also focus on the release of the minutes from the Federal Reserve's last meeting, due on Wednesday, for further insight into the outlook for monetary policy in the months ahead.
After the Fed hiked rates four times in 2018, investors now expect the U.S. central bank to halt its monetary tightening policy this year as risks to the U.S. economy mount.
"Looser monetary policies are generally favorable to gold, which has benefited since the Fed paused its tightening path," said Nicholas Frappell, global general manager, ABC Bullion.
In other metals trading, silver futures tacked on 6.9 cents, or about 0.4%, to trade at $15.81 a troy ounce.
Meanwhile, palladium futures jumped 1.6% to reach an all-time high of $1,430.45 an ounce.
"In combination with supply-side issues, the market is going to be in a sizeable deficit this year ... potential for better-than-expected demand from China will exacerbate that tightness," said ANZ analyst Daniel Hynes.