Spot gold gained 0.1% to $2,402.61 per ounce, while U.S. gold futures added 0.2% to $2,403.30

Gold prices edged up on Monday as the dollar dropped following U.S. President Joe Biden’s decision to withdraw from the 2024 presidential race, with investors turning to bullion as a hedge against an uncertain political and market outlook.

Spot gold gained 0.1% to $2,402.61 per ounce, as of 0758 GMT, while U.S. gold futures added 0.2% to $2,403.30.

The prospect of rate cuts and political uncertainty in the U.S. are supporting gold prices, and conditions are in place for gold to see another record high before the end of 2024, according to Kyle Rodda, a financial market analyst at Capital.com.

Making bullion more attractive to buyers holding other currencies, the dollar dropped in the initial reaction to Biden abandoning his re-election bid, clearing the way for another Democrat to challenge Donald Trump.

When accepting the Republican nomination on Thursday, Trump reiterated his promise to cut corporate taxes and interest rates. Analysts also expect a Trump presidency would make for tougher trade relations, which could result in inflationary tariffs.

I think there is an almost unstoppable process of decoupling between the U.S. and China, it will only become more severe or accelerate if it is a Trump presidency. Gold will certainly benefit from greater geopolitical tensions, Rodda added.

Gold prices hit an all-time high of $2,483.60 last week on increased chances of U.S. interest rate cuts this year, with markets pricing in a 97% probability of a cut in September, as per the CME FedWatch Tool.

On the data front, the main focus this week will be on Friday’s U.S. PCE number.

Spot silver declined 0.7% to $29.05 after dropping 5% last week.