Gold prices close to one-week high due to weaker currency and demand for safe haven assets

Due to the small depreciation of the US dollar and the increasing tensions in the Middle East, gold prices surged to almost one-week highs on Monday. As of 03:35 , spot gold was up 0.4% at $2,021.09 an ounce, reaching a peak not seen since February 13. Additionally, U.S. gold futures increased 0.4% to $2,032.40 an ounce.

The dollar index dropped 0.1%, which reduced the cost of bullion purchased in US dollars for buyers abroad.A more hawkish stance from policymakers might fuel concerns that interest rates would remain high for an extended period of time, which could be detrimental to gold prices.

For any hints about when the Fed might start lowering interest rates, attention will turn to the minutes of its January policy meeting, which are expected on Wednesday.

Based on the CME Fed Watch Tool, markets are pricing in a 77% chance of a cut in June. Holding bullion has a lower opportunity cost when interest rates are lower. Spot silver dropped 1.2% to $23.12 per ounce, spot platinum dropped 0.4% to $902.37, while spot palladium increased 0.9% to $958.66.

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