Gold bars. Picture: REUTERS
Gold bars. Picture: REUTERS

Bengaluru — Gold prices edged higher on Monday as the dollar softened ahead of key central bank policy meetings and the US-North Korea summit this week, and as a weekend G7 summit fanned trade war fears.

Spot gold was up 0.1% at $1,299.30 an ounce at 3.39am GMT.

US gold futures for August delivery were 0.1% higher at $1,303.40/oz.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1% at 93.495.

"The market opened predictably quiet ahead of the abundance of risk events this week and wholly ignored President Trump going rogue at the G7," said Stephen Innes, Asia-Pacific trading head at Oanda.

With geopolitical risk moderating, it would be the Fed and ECB that would guide gold’s near-term fate, he said.

US President Donald Trump threw the G7’s efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau, adding that he might double down on import tariffs by hitting the sensitive auto industry.

The US Federal Reserve’s Federal Open Market Committee (FOMC) starts its two-day meeting on Tuesday, where it is anticipated to raise US interest rates.

The European Central Bank (ECB) and Bank of Japan’s policy meetings are also due this week.

Markets are also keeping a close eye on the historic summit between Trump and North Korean leader Kim Jong-un in Singapore on Tuesday.

A Hong Kong-based trader said gold was trading in a very tight range and people were waiting for the next.

"We have the FOMC coming up and the Trump meeting with Kim Jong-un, so the markets are just watching what’s going on. If there’s a better risk aversion money will fly into gold."

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.46% to 828.76 tonnes on Friday, the lowest since February 22.

Speculators cut their net long position in Comex gold by 3,169 contracts to 58,066 contracts in the week to June 5, US Commodity Futures Trading Commission (CFTC) data showed on Friday.

Silver gained 0.9% at $16.89/oz, after hitting a seven-week high of $16.93 earlier in the session. The metal was up 2.3% last week, its biggest weekly percentage rise in seven-weeks.

Palladium was nearly unchanged at $1,014.15/oz. Platinum rose 0.8% at $908.70/oz.