Gold Prices Dip Amid Dollar Strength and Anticipation of U.S. Inflation Data
Gold Market Performance
Gold prices fell in Asian trade on Tuesday, remaining within a tight trading range in the low $2,300s. The recent strength of the dollar and anticipation of key inflation data have kept traders cautious about the yellow metal.
Spot Gold: Fell 0.4% to $2,325.56 an ounce.
Gold Futures: Declined 0.3% to $2,337.35 an ounce by 00:10 ET (04:10 GMT).
Dollar Impact and Inflation Concerns
Despite an overnight drop in the dollar, the greenback remains favored due to uncertainty over U.S. interest rates.
Gold has been trading around the low $2,300s per ounce over the past week, as traders are uncertain about potential U.S. interest rate cuts this year. While May's inflation data was somewhat encouraging, it still indicated significant price pressures. Additionally, unexpectedly strong purchasing managers index prints for June have raised concerns that the robust U.S. economy will maintain high rates for longer.
Focus on PCE Price Index
This week, attention is focused on the Personal Consumption Expenditures (PCE) price index data, the Federal Reserve’s preferred inflation gauge. The reading is due on Friday and is expected to show slight cooling in inflation but still remain above the central bank’s 2% annual target. High rates negatively impact metal markets as they increase the opportunity cost of investing in non-yielding assets like gold.
Other Precious Metals
Platinum Futures: Rose 0.4% to $1,016.55 an ounce.
Silver Futures: Fell 0.1% to $29.817 an ounce.
Copper Prices Rise Amidst China Concerns
Copper Market Performance
Among industrial metals, copper prices advanced on Tuesday, recovering slightly from recent losses.
Benchmark Copper Futures (London Metal Exchange): Rose 0.4% to $9,703.50 a tonne.
One-Month Copper Futures: Increased 0.5% to $4.4413 a pound.
China-Related Sentiment
Sentiment towards copper remains fragile due to concerns over China, its top importer. Beijing is raising the prospect of a trade war with the European Union and the U.S. in response to steep import duties on Chinese electric vehicles. Both copper contracts have experienced steep declines in recent weeks due to soured sentiment towards China and doubts over the prospects of a global economic recovery this year.
