Gold inched higher on Monday, as investors anticipated the US central bank monetary policy meeting this week that is expected to boost interest rates, and ahead of a US-North Korea summit. Spot gold gained 0.1 percent to $1,299.83 ounce by 1:46 p.m. EDT (1746 GMT). US gold futures for August delivery settled up 50 cents, or 0.04 percent, at $1,303.20 per ounce.
The US Federal Reserve will likely raise its target interest rate to above the rate of inflation for the first time in a decade, seeking to sustain the second-longest US expansion on record while continuing to edge rates higher.
Higher interest rates dent the appeal of non-interest bearing assets like gold. Yet gold climbed higher.
"With the geopolitical risk with North Korea and the Fed rate hike being baked into the market, there's really no downside potential for gold. Only upside potential if something doesn't dust the market," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
"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, APAC trading head at OANDA, adding that with geopolitical risk moderating, the Fed and the European Central Bank (ECB) would guide gold's near-term fate.
The ECB and Bank of Japan also have policy meetings this week. Meanwhile, silver gained 0.8 percent to $16.87 an ounce, after hitting a seven-week high of $16.95 earlier in the session.
Palladium climbed 0.7 percent to $1,021.47 an ounce, while platinum rose 0.3 percent to $904.10. Platinum touched a one-week high of $910.50 earlier in the session.
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