Gold Prices Rise on Dollar Weakness; Copper Surges on Weaker Dollar
Gold Prices Rise on Dollar Weakness
Gold prices in Asian trade on Monday capitalized on a recent drop in the dollar following softer-than-expected U.S. payrolls data, leading traders to increase bets on eventual interest rate cuts by the Federal Reserve.
Mixed Sentiment
However, gains in gold were tempered by improved risk appetite in the wake of Friday’s nonfarm payrolls data, prompting investors to pivot into more risk-exposed assets like stocks.
Gold Performance
Spot gold rose 0.4% to $2,310.05 an ounce, while gold futures expiring in June also climbed 0.4% to $2,318.70 an ounce by 00:31 ET (04:31 GMT).
Rate Cut Speculation Supports Gold
The recent gains in gold come after a significant decline from record highs over the past three weeks. Concerns about prolonged high interest rates and reduced safe-haven demand had previously weighed on the precious metal.
Dollar's Impact
Gold received some support from the weakening dollar, which dropped 0.8% last week, largely due to Friday’s payrolls reading, fueling expectations of potential rate cuts by the Fed starting in September.
Fed's Dilemma
While a cooling labor market may prompt the Fed to consider rate cuts, the central bank remains concerned about stubborn inflation, which exceeded its annual 2% target in the first quarter. This has led traders to price out most expectations for rate cuts this year.
Industrial Metals Performance
Platinum futures fell 0.3% to $962.60 an ounce, while silver futures surged 1.7% to $27.130 an ounce, reflecting mixed sentiment among other precious metals.
Copper Prices Surge
Copper prices rose on Monday, nearing two-year highs, benefiting from a weaker dollar. Three-month copper futures on the London Metal Exchange climbed 1.7% to $9,930.0 a ton, while one-month copper futures rose 0.5% to $4.5888 a pound.
Market Outlook
With expectations of tighter markets due to metal sanctions against Russia and hopes of improved demand in top importer China, copper prices remain in focus amid ongoing market dynamics.
