Gold prices have staged a strong rebound, capturing the attention of global investors as the US dollar weakens and markets brace for pivotal US-China trade negotiations. New York gold futures rose 0.2% to $3,354.90 per ounce , while spot gold jumped 0.8% to $3,335.02 , recovering from an earlier dip to a one-week low.

Dollar Decline Fuels Gold Rally

Analysts attribute the rally primarily to the sliding US dollar index. A weaker dollar increases the purchasing power of foreign investors holding other currencies, making dollar-denominated gold more attractive and driving demand higher.

Trade Talks and Economic Signals in Focus

This week's high-stakes US-China trade negotiations in London—the first since early May talks in Geneva—have become a key market catalyst. "While positive trade outcomes may create short-term pressure on gold, the broader impact will likely be limited," said Bart Melek, TD Securities' Global Head of Commodity Strategy. "With economic softness persisting, rate cut expectations and declining risk appetite will continue supporting gold. Inflation concerns further enhance its safe-haven appeal."

Investors are also awaiting the upcoming US Consumer Price Index (CPI) release, which will provide critical insights into the Federal Reserve's potential rate cut trajectory. Meanwhile, China's central bank has signaled sustained confidence in gold, adding to reserves for a seventh consecutive month in May amid global economic uncertainty.

With multiple bullish factors converging—from monetary policy shifts to geopolitical tensions—market participants are closely monitoring gold's momentum for strategic opportunities.