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Gold prices drifted higher on Monday as the dollar eased 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 rose 0.1% to $2,402.61 per ounce, as of 0758 GMT, while U.S. gold futures gained 0.2% to $2,403.30.

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

Making bullion more attractive to buyers holding other currencies, the dollar eased in the initial reaction to Biden abandoning his reelection bid, clearing the way for another Democrat to challenge Donald Trump. [USD/]

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 said.

Gold prices scaled 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% chance of a cut in September, according to the CME FedWatch Tool.

On the data front, the main focus this week will be on Friday's U.S. personal consumption expenditures (PCE) figure.

Spot silver fell 0.7% to $29.05 after falling 5% last week.

Silver's long-term outlook remains supportive amid several years of structural supply deficit and energy transition, said Frank Watson, market analyst at Kinesis Money.

Platinum slipped 0.1% to $961.85 while palladium rose 0.9% to $914.19.