Gold prices in Asian trading on Monday showed minimal movement, lacking significant support despite heightened expectations of impending U.S. interest rate cuts. The precious metal, which has maintained a steady trading range throughout June, struggled to gain momentum even as the dollar weakened.
As of 00:09 ET (04:09 GMT), spot gold dipped slightly to $2,325.74 per ounce, while gold futures for August delivery also declined by 0.2% to $2,336.05 per ounce. The subdued performance comes amidst increasing bets among traders for a rate cut in September, following the release of the PCE price index data last week.
The dollar index extended its losses by over 0.2% on Monday, continuing the trend from previous sessions. According to the CME Fedwatch tool, there is now a nearly 58% probability priced in by traders for a 25 basis point rate cut in September. While lower interest rates typically benefit metal markets, gold prices remained relatively unchanged as traders awaited further signals from the Federal Reserve and upcoming economic indicators.
Market focus turns to key events later in the week, including Fed Chair Jerome Powell’s speech scheduled for Tuesday, and the release of minutes from the Fed’s June meeting on Wednesday. Additionally, the nonfarm payrolls data for June, due on Friday, is expected to provide further insights into the economic outlook.
In tandem with gold, other precious metals also faced downward pressure on Monday. Platinum futures declined by 0.5% to $1,004.60 per ounce, while silver futures fell by the same margin to $29.405 per ounce.
In the industrial metals sector, copper prices experienced a retreat amid mixed economic data from China, the world’s largest copper importer. Benchmark copper futures on the London Metal Exchange dropped by 0.6% to $9,545.50 per tonne, while one-month copper futures fell by 0.5% to $4.3550 per pound. The conflicting reports on China’s manufacturing sector, showing a contraction according to official PMI data but growth according to private data, added to market uncertainty over the pace of economic recovery.
The divergence in economic indicators from China contributed to a cautious sentiment among traders, impacting copper prices negatively throughout June amidst concerns over the broader economic implications.
Overall, the outlook for gold and industrial metals remains cautious pending further clarity on U.S. monetary policy and global economic trends in the coming days.
