Investing.com - Gold prices were modestly higher in European trade on Monday, starting the week off with small gains as investors continued to assess the impact of the latest bout of U.S. political turmoil.
Comex gold futures added $1.30, or about 0.1%, to $1,254.92 a troy ounce by 3:55AM ET (07:55GMT). Meanwhile, spot gold was at $1,255.33.
Prices of the yellow metal rose to $1,263.20 last Thursday, the most since May 1.
Gold notched a weekly gain of around 2% last week, the largest since mid-April, as political uncertainty surrounding the Trump administration pressured the dollar lower and boosted demand for safe-haven assets.
Investor sentiment has been hit by fears that the U.S. political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.
The dollar index, which tracks the greenback against a basket of six major rivals, was up roughly 0.3% at 97.25 in London morning trade. It fell to a six-month low of 96.96 on Friday, having given up all the gains it had made following the election in November.
Meanwhile, investors will look ahead to Wednesday’s minutes of the Federal Reserve’s latest policy meeting in the week ahead for further hints on the timing of the next U.S. rate hike.
In addition, a handful of Fed policymakers are due to make public appearances this week that may offer insight into the likelihood of higher interest rates in the months ahead.
Monday sees Minneapolis Fed President Neel Kashkari, Philadelphia Fed President Patrick Harker, Federal Reserve Governor Lael Brainard and Chicago Fed President Charles Evans make public appearances.
Market players will also keep an eye out on a revised reading of first-quarter U.S. growth data on Friday to gauge if the world’s largest economy is strong enough to withstand a rate hike as early as next month.
Futures traders are currently pricing in around a 75% chance of a hike at the Fed's June meeting, according to Investing.com’s Fed Rate Monitor Tool.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Also on the Comex, silver futures advanced 19.9 cents, or about 1.2%, to $16.99 a troy ounce, after hitting its highest since May 1 at $17.17 earlier.
Elsewhere in metals trading, platinum shed 0.1% to $939.35, while palladium dipped 0.3% to $758.88 an ounce.
Copper futures shed 0.6 cents to $2.576 a pound.