Spot gold rose 0.7% to $4,009.39 per ounce as of 0141 GMT, recovering from Monday’s more than 3% plunge — its sharpest drop since early October. U.S. gold futures for December delivery inched up 0.1% to $4,022.10.

“Buyers who were waiting on the sidelines for gold are now being tempted into taking positions at these price levels,” said Tim Waterer, Chief Market Analyst at KCM Trade. “A softer dollar is also giving gold a reprieve.”

The dollar index slipped 0.1%, making bullion more attractive for holders of other currencies.

Market sentiment improved after top U.S. and Chinese officials outlined a framework for a potential trade deal, which Presidents Trump and Xi Jinping are expected to discuss later this week. Trump also announced a series of trade and mineral agreements in Malaysia during his Asia tour.

“If Trump and Xi have a productive meeting on trade, gold may face some headwinds,” Waterer added. “However, a dovish signal from the Federal Reserve, which is expected to cut rates this week, could support prices.”

The Fed’s policy decision on Wednesday will be closely watched, along with upcoming meetings from the European Central Bank and Bank of Japan, both expected to hold rates steady.

Despite recent volatility, gold remains up 53% year-to-date, having hit a record $4,381.21 on October 20, driven by geopolitical tensions, rate-cut expectations, and steady central bank buying.