Gold regains the $4,000 level amid the decline of the dollar and the possibility of an interest rate cut

Gold recovered some of its losses today, and rose again above the level of $4,000 per ounce with the decline of the dollar and expectations that the US Central Bank will reduce interest rates, despite pressure resulting from indicators of a solution to the trade tension between the United States and China.

Gold rose in instant transactions by 0.7 percent, recording $4,009.39 per ounce, by 01:41 GMT, after falling by more than three percent yesterday, Monday, to its lowest level since October 10.

US gold futures for December delivery rose 0.1 percent to $4,022.10 an ounce.

“Buyers who were anticipating buying gold are now being tempted to take positions at these price levels,” said Tim Waterer, chief market analyst at KCM Trade. “We are also seeing some weakness in the dollar, which is giving gold a reprieve.”

The dollar index fell by 0.1 percent against a group of major currencies, which makes gold less expensive for holders of other currencies.

On Sunday, senior Chinese and American economic officials discussed the framework of a trade agreement to present to US President Donald Trump and his Chinese counterpart Xi Jinping later this week.

Trump said he believed an agreement would be reached with China, and announced a series of agreements on trade and strategic minerals in Malaysia with four countries in Southeast Asia during his first stop of his five-day Asian tour.

“If Trump and Xi have a productive meeting on trade this week, it could leave gold swimming against the tide a bit,” Waterer said. “But that could be offset if the Federal Reserve (the US central bank) delivers a hawkish tone with an expected interest rate cut this week.”

At the same time, both the European Central Bank and the Bank of Japan are widely expected to hold interest rates steady later this week.

Gold gained about 51 percent this year, reaching its highest levels ever at $4,381.21 on October 20, supported by geopolitical and economic uncertainty, bets on lowering interest rates and continued central bank purchases.

As for other precious metals, silver fell in spot transactions by 0.3 percent to $46.74 per ounce, platinum fell by 1.2 percent to $1,571.85, and palladium fell by 0.8 percent to $1,391.15.