Gold settles up 1.5% as selling pressure eases

Gold bars

Gold prices rose on Monday, snapping back from recent weakness as selling pressure subsided and investors took advantage of lower prices following signs of easing trade tensions between the United States and China.

June gold futures settled 1.5% higher at $3,347.7 per ounce.

"We're starting to see the first signs of selling exhaustion," TD Securities commodity strategist Daniel Ghali told Reuters, adding that the downside risk in gold is extremely limited.

"Western investors, particularly discretionary traders or macro funds, have been completely under-positioned in this last leg of gold's rally and as a result of that, there's limited amount of selling activity and gold prices are drifting higher to reflect that," Ghali said.

That shift contributed to a noticeable drop in selling activity, helping support gold during Monday’s session.

The US dollar also weakened, with the dollar index—which tracks the greenback against six major currencies—down 0.45% at 99 as of 9:56 p.m. Mecca time.