An employee casts ingots of gold at the Krastsvetmet plant in Krasnoyarsk, Russia. Spot gold was up on Monday morning, November 26 2018. Picture: REUTERS/ILYA NAYMUSHIN
An employee casts ingots of gold at the Krastsvetmet plant in Krasnoyarsk, Russia. Spot gold was up on Monday morning, November 26 2018. Picture: REUTERS/ILYA NAYMUSHIN

Bengaluru — Gold prices rose on Monday as the dollar weakened, with uncertainties over the outcome of an upcoming G20 meeting and the future course for Britain’s exit from the EU providing further support for bullion.

Spot gold was up 0.3% to $1,225.78 an ounce at 11.15am GMT. US gold futures were up 0.2% at $1,226.1 an ounce.

US President Donald Trump and Chinese President Xi Jinping are expected to meet on the sidelines of a G20 summit in Argentina at the end of this week.

Officials from some G20 countries, anxious to see a swift end to the Sino-US trade war, are hopeful but not confident the meeting may yield at least a partial ceasefire.

“We have the G20 meeting coming this weekend and the question is whether the US and China can strike a deal,” said Saxo Bank analyst Ole Hansen, adding gold could be set to benefit anyway because he believes the dollar is “coming to the end of its strong phase.”

At the same time, investors are keeping a close eye on the latest political developments in Europe. The euro strengthened against the dollar after the EU and Britain agreed on Sunday to a Brexit deal, and following signs Italy is willing to reach a compromise over its 2019 budget plans.

“Ahead of the G20, we have plenty of uncertainty that is providing some underlying support — Brexit, which now goes to vote in the UK parliament, and the geo-political event on the Black Sea between Russia and Ukraine,” Hansen said.

Gold is considered a safe asset in uncertain times. However, analysts have said its direction in the near term will largely be dictated by the dollar’s movement. A weaker dollar makes gold more attractive for investors using other currencies to buy the metal.

“The rise in gold this morning is primarily being driven by the decline in the dollar,” said Craig Erlam, senior market analyst at Oanda in London.

Among other precious metals, silver climbed 1% to $14.39 an ounce and platinum rose 0.9% to $845.80.

Palladium gained 1.6% at $1,137 an ounce. Prices fell about 3% in the previous session, their biggest one-day percentage decline since August 15. 

Reuters