By Swati Verma
BENGALURU (Reuters) - Gold climbed to a near one-month high on Monday as the dollar weakened after the United States and China agreed during the G20 summit in Argentina to a temporary truce in their trade war.
Spot gold rose 0.7 percent to $1,230.81 per ounce at 1015 GMT, having touched its highest level since Nov. 7 at $1,232.22 earlier in the session.
U.S. gold futures gained 0.9 percent to $1,236.50 per ounce.
Washington and Beijing agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to resolve their differences with new talks aimed at reaching an agreement within 90 days.
This weighed on the dollar index, which measures the greenback against a basket of six major currencies, making gold cheaper for holders of other currencies.
"In this case, there could be space for further rallies, with a first target at $1,260 and a more ambitious one at $1,300. A climb would become more likely if the U.S. Federal Reserve reduces the number of rate hikes in 2019/2020."
Gold tends to gain when rate hike expectations recede because lower rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.
The U.S. currency was the preferred safe haven this year as the U.S.-China trade war unfolded against a backdrop of higher U.S. interest rates, denting bullion's appeal.
In the week to Nov. 27, speculators increased their net short position in gold by 8,464 contracts to 51,828 contracts, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
"The key point is still the very bearish positioning in the futures market which is partly due to the strong U.S. dollar and the outlook for further rising interest rates. Now that we have a relief in that regard this could provide some more upside for gold in the short term," Julius Baer's Menke said.
Among other precious metals, palladium gained 0.7 percent to $1,186.50 per ounce, after having crossed the $1,200 mark for the first time on Friday.
Spot silver climbed 1.6 percent to $14.40 per ounce and platinum rose over 1 percent to $806.24 per ounce.
(Reporting by Swati Verma in Bengaluru, editing by Ed Osmond)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)