Spot gold was up 2.4% at $3 413 an ounce at 19h56 CAT, its highest since April 22, when it hit a record high of $3 500 per ounce.

US gold futures settled 3% higher at $3 422. Markets in top consumer China reopened after the Labour Day holiday, which ran from May 1 to 5.

"The bull market is being driven by China's latest gold investing surge, plus the ongoing bid from central banks wanting to cut their exposure to US assets, most especially the Dollar," said Adrian Ash, Director of Research at Bullion Vault.

The Dollar struggled as investors began to grow impatient over hoped-for US trade deals, making greenback-priced gold less expensive for other currency holders. Bullion, a hedge against uncertainty, has hit multiple record highs this year amid market jitters sparked by tariff developments.

US President, Donald Trump on Monday signaled that he plans to announce new tariffs on pharmaceutical products over the next two weeks. Earlier on Sunday, Trump had announced 100% tariffs on movies produced overseas.

"We think there is increased participation from speculators in China. In the West, we think that despite the fact that prices are overbought, gold is significantly under-owned. Both of these factors should underscore stronger gold prices," TD Securities Commodity Strategist, Daniel Ghali.

"Prices can trade up to $4 000 an ounce this year," Ghali.

Investors are closely watching the Fed’s upcoming policy decision on Wednesday, with Chairperson, Jerome Powell’s remarks expected to offer clues on the potential timing of interest rate cuts.

Higher interest rates decrease zero-yielding gold's attractiveness.

Spot silver gained 1.9% to $33 an ounce, platinum rose about 2.4% to $982 and palladium added 3.1% to $971.

---Reuters---