Investing.com - Gold prices rose to more-than-a-month high on Monday as a drop in the dollar lent support to the precious metal following news that the U.S. and China agreed to put any new tariffs on hold for 90 days.
At 11:04 AM ET (16:04 GMT), gold futures for February delivery on the Comex division of the New York Mercantile Exchange gained $12.60, or 1.03%, to $1,238.60 a troy ounce, after touching $1,240.40 earlier, its highest level since Oct. 26.
Meanwhile, the?EUR?U.S. U.S. dollar index, which tracks the greenback against a basket of six major currencies, was down 0.37% to 96.83.
The White House said on Saturday that President Donald Trump told China's President Xi Jinping at the G20 talks in Argentina that he would not raise tariffs on $200 billion of Chinese goods to 25% on Jan. 1 as previously announced and that the two sides will hold negotiations aimed at reaching a deal within 90 days.
Stocks and other risk assets jumped on Monday, reducing demand for the safe-haven dollar. A weaker greenback makes gold more attractive for holders of foreign currencies.
"A lot will depend on developments in the next 90 days, but given the U.S. and China are on different pages, we don't think the optimism can last. We reiterate trade wars need to be framed in terms of who hurts the least and see the G20 meeting as a stronger win for the U.S.," said Sue Trinh, head of Asia EM FX strategy at RBC Capital Markets, in a note.
Apart from trade, investors will also be turning their attention to U.S. monetary policy, ahead of an expected rate hike by the Federal Reserve at its upcoming meeting later this month, which would be the fourth rate hike this year.
The dollar was pressured lower last week when the market took comments by Fed Chairman Jerome Powell as an indication that the Fed could slow its program of hiking interest rates.
“We believe that Powell has simply toned down his hawkish tilt seen in October, with the Fed on track to deliver a hike, the fourth this year, at the FOMC meeting on 19 December, as well as another four increases in 2019,” Philip Wee, currency strategist at DBS, said in a note.
A slower-than-expected pace of interest rate increases would lessen the pressure on non-yielding bullion.
Powell was scheduled to appear before Congress's Joint Economic Committee on Wednesday, but the testimony has been postponed after U.S. President Donald Trump declared a national day of mourning following the death of President George H.W. Bush.
In other metals trading, silver futures advanced 2.52% at $14.575 a troy ounce 11:06 AM ET (16:06 GMT).
Palladium futures gained 2.71% to $1,175.60 an ounce, while sister metal platinum rose 1.08% at $808.40
In base metals, copper traded up 1.56% to $2.831 a pound.
-- Reuters contributed to this report