Gold prices inched higher in Asian trade on Monday, reclaiming some of the losses incurred last week as traders maintained a cautious stance ahead of a crucial U.S. inflation report scheduled for later in the week.
With market holidays observed in the UK and the U.S., trading volumes remained subdued, while uncertainty surrounding U.S. interest rates further deterred significant market movements.
Meanwhile, copper prices also saw a modest rise after experiencing a decline from recent record highs.
Spot gold increased by 0.4% to $2,343.23 an ounce, while gold futures expiring in June climbed by a similar margin to reach $2,344.10 an ounce by 00:33 ET (04:33 GMT). Despite this rise, spot prices were still recovering from recent declines.
The spotlight this week is on the Personal Consumption Expenditures (PCE) price index data, the Federal Reserve’s preferred inflation gauge, scheduled to be released on Friday. Traders closely watch this data following warnings from Fed officials about persistent inflation, which have led to decreased expectations of rate cuts by the central bank this year. As a result, traders are now pricing in a higher likelihood of the Fed maintaining rates unchanged in September, rather than cutting them as previously anticipated.
This shift in market sentiment has put pressure on gold and other metals in recent weeks, as traders show a growing preference for the dollar and Treasuries over alternative investments like gold.
In addition to gold, other precious metals also saw gains on Monday, rebounding from losses experienced last week. Platinum futures rose by 1.2% to $1,048.70 an ounce, while silver futures increased by 1.7% to $31.023 an ounce.
Meanwhile, copper prices steadied with one-month futures rising by 0.3% to $4.7720 a pound. Focus is now on the state of physical copper markets and the potential impact of stimulus measures recently announced by China, the world’s top copper importer.
