Gold prices showed little movement in Asian trading on Tuesday as investors adopted a cautious stance ahead of a busy week for central bank meetings, particularly the U.S. Federal Reserve.
The price of gold remained within a narrow range of $2,600 to $2,700, as market participants turned to the U.S. dollar in anticipation of upcoming rate decisions from the Federal Reserve, the Bank of Japan (BOJ), and the Bank of England (BOE).
Spot gold rose by 0.1% to $2,654.99 per ounce, while gold futures for February delivery also increased by 0.1%, reaching $2,671.91 per ounce by 23:19 ET (04:19 GMT).
Fed Expected to Cut Rates, but Focus on Future Outlook
The Federal Reserve is widely expected to announce a 25 basis point interest rate cut at the conclusion of its two-day meeting on Wednesday. However, market participants will be closely scrutinizing the Fed’s forward guidance, as there is growing speculation that the central bank will signal a more gradual pace of rate cuts in the year ahead.
Recent economic data, including persistent inflation and a resilient labor market, have raised concerns that the Fed may have less room to aggressively lower rates. These factors have led to expectations that interest rates in the U.S. could remain relatively higher, supporting the U.S. dollar and exerting downward pressure on gold prices, which have retreated from record highs in recent weeks. Higher interest rates reduce the appeal of gold and other metals, which offer no yield compared to income-generating assets.
BoJ and BoE to Follow Suit
In addition to the Fed, both the Bank of Japan and the Bank of England are set to announce their own rate decisions this week. The BOE is widely anticipated to lower rates further to support a sluggish British economy, while analysts remain divided on whether the BOJ will raise rates following its landmark policy shift earlier this year.
Other precious metals saw little movement. Platinum futures held steady at $941.35 per ounce, while silver futures dipped 0.3% to $30.955 per ounce.
Copper Prices Dip Amid Concerns Over China’s Economic Slowdown
Meanwhile, copper prices faced downward pressure on Tuesday as concerns mounted over slowing economic growth in China, the world’s largest consumer of copper. Benchmark copper futures on the London Metal Exchange fell 0.2% to $9,052 per ton, while February copper futures declined 0.5% to $4.1745 per pound.
The red metal had retreated on Monday after weak economic data from China, which indicated ongoing struggles despite efforts by the Chinese government to boost economic activity. While demand for copper in China has remained relatively resilient, fears of a potential slowdown in the country’s economy are weighing on market sentiment.
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