Gold prices climbed to over three-week high on Monday, lifted by a weak U.S. dollar after the U.S. and China agreed to a 90-day truce on their escalating trade war during a weekend meeting between the presidents of the two countries in Argentina.
The U.S. President Donald Trump agreed to hold off on his threat to slap 25% tariffs on US$200 billion worth of Chinese goods from January 1. China, for its part, agreed to by very substantial amount of agricultural, energy, industrial and other products from the U.S. to narrow its trade gap with the U.S.
Trump said on Monday that China will be "opening up" and "getting rid of tariffs." He wrote on Twitter that China has agreed to reducer and remove tariffs on cars coming into the country from the U.S.
The dollar index was hovering around 96.90 a little while ago, losing about 0.3%.
The dollar's weakness was also due to comments from Federal Reserve Chair Jerome Powell last week that interest rates are currently just below neutral. His comments have raised expectations that there would be a pause in rate hikes sometime soon.
Gold futures for February ended up $13.60, or 1.1%, at $1,239.60 an ounce, the highest settlement in more than a month for a most active contract.
On Friday, gold futures for February settled down $4.40, or 0.36%, at $1,226.00 an ounce.
Silver futures for March settled at $14.499 an ounce, gaining about 2%.
Copper futures for March ended up by about 0.6%, at $2.8095 per pound.
In U.S. economic news today, a report from the Institute of Supply Management showed an unexpected acceleration in the pace of growth in manufacturing activity in the month of November.
The ISM said its purchasing managers index climbed to 59.3 in November after falling to 57.7 in October, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to edge down to 57.5.
Meanwhile, a separate report from the Commerce Department showed construction spending unexpectedly edged lower in October.
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