Gold prices experienced a minor decline in Asian trading on Monday, yet remained close to the record highs reached last week. The drop came as lower U.S. interest rates continued to impact the dollar, which in turn bolstered the outlook for precious metals.
Last week, gold prices surged to unprecedented levels, driven by dovish remarks from Federal Reserve Chair Jerome Powell and ongoing geopolitical tensions. Spot gold decreased by 0.1% to $2,509.88 per ounce, while December futures also fell 0.1% to $2,545.10 per ounce. The record high for spot gold was $2,532.05 per ounce, set last week.
The recent gains in gold were largely fueled by expectations that the Federal Reserve will start cutting interest rates in September. Powell’s comments on Friday about imminent rate cuts and his disapproval of further labor market cooling contributed to the weakening dollar, which benefits gold by reducing the opportunity cost of holding non-yielding assets.
Other precious metals saw gains last week but retreated on Monday. Platinum futures dropped 0.6% to $965.45 per ounce, and silver futures fell 0.4% to $30.145 per ounce. Safe-haven demand for gold was also supported by escalating conflicts, including heightened hostilities between Israel and Hezbollah and ongoing fighting between Russia and Ukraine.
In the industrial metals sector, copper prices saw a slight decrease on Monday after a recent rebound. The decline was attributed to ongoing concerns about slowing demand from China, the top importer of copper. Copper futures for one month fell 0.1% to $4.2557 per pound, following a sharp rise in the past week driven by hopes that lower interest rates would stimulate global demand.
