In Asian trading on Tuesday, gold prices retreated from near-record levels as a resurgence in stock markets tempered some of the demand for safe-haven assets. Despite this slight pullback, the precious metal remained relatively strong amidst fragile market sentiment.
The previous day had witnessed gold surging towards record highs, propelled by a global equity market plunge that prompted investors to seek refuge in safe havens like gold and the yen. This surge was further fueled by growing expectations of a U.S. recession and potential interest rate cuts, which not only buoyed gold prices but also weighed on the dollar.
Geopolitical tensions added another layer of support to gold prices, with concerns surrounding potential retaliatory actions by Iran and Hamas against Israel following the killing of a Hamas leader in Tehran.
As of 01:50 ET (05:50 GMT), spot gold slipped by 0.3% to $2,402.57 per ounce, while December gold futures dipped by 0.1% to $2,443.0 per ounce. Earlier in the week, spot prices had briefly touched $2,460 per ounce.
While gold weakened slightly on Tuesday due to a rebound in the dollar from a seven-month low, the metal retained much of its recent gains. The renewed strength in equity markets lessened the demand for safe-haven assets like gold, as riskier assets saw increased interest from bargain hunters.
Despite these fluctuations, gold remained attractive to investors due to expectations of lower interest rates, which tend to drive flows into the precious metal by lowering the opportunity cost of holding it.
In contrast, other precious metals saw mixed fortunes, with platinum futures stabilizing at $918.85 an ounce, while silver futures experienced a 0.7% decline to $27.020 an ounce.
Industrial metals, particularly copper, faced challenges as prices slid amidst recession fears in the U.S. and uncertainties surrounding China’s economic trajectory. Benchmark copper futures on the London Metal Exchange dropped by 0.6% to $8,806.50 per tonne, with one-month copper futures declining nearly 1% to $3.9660 per pound.
Investor concerns about a potential U.S. recession were exacerbated by lackluster labor market data and signs of slowing manufacturing activity. Weak manufacturing figures from China only added to these worries, casting shadows on copper’s outlook due to potential weakening demand on a global scale.
This week’s economic focus remains on forthcoming data from China, particularly trade and inflation figures expected later in the week, which could further influence market dynamics and metal prices.
