Gold rebounds at the beginning of the week and turns green for the first time in 10 days.

Gold prices witnessed a significant recovery after rebounding upward during trading on Monday, marking the first time since November 7 of last year. Spot gold contracts rose by more than $30 per ounce, following a week where the yellow metal experienced its worst week since 2021 at the end of the previous week.

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In terms of trading, spot gold prices increased by about 0.84% to $2,585.20 per ounce, after briefly touching the $2,597.26 level earlier in the session, while December gold futures rose by 0.7% to register $2,588.10 per ounce.

What Caused Gold to Turn Positive Today?

Today's rise in gold came amid recent geopolitical escalations, which heightened investor acceptance of gold as a safe haven amid a potential technical correction for the yellow metal, following losses that extended for six consecutive sessions that pushed gold to trade at its lowest levels in over a month after former U.S. President Donald Trump's victory in the U.S. elections.

On the geopolitical front, the United States allowed Ukraine yesterday to use American weapons in shelling operations against Russia, while Russia shot down about 30 drones, escalating tensions between Moscow and Washington. The former warned that this decision could signal the beginnings of a third world war, which provided some support to gold.

Additionally, comments from certain Federal Reserve officials last week added uncertainty about the timing and extent of potential U.S. interest rate cuts. However, markets are currently pricing in approximately a 65% chance that the Federal Reserve will reduce interest rates by 25 basis points at the December monetary policy meeting.

Investors are now focusing on upcoming statements from other policymakers at the Federal Reserve this week, alongside some U.S. data being released this week in search of clearer guidance regarding the direction of U.S. interest rates in the coming months.