Gold prices slipped slightly during Asian trading on Tuesday, remaining in a narrow trading range as traders awaited crucial signals on U.S. interest rates. The yellow metal has been under pressure throughout June due to concerns over high U.S. interest rates, which have bolstered the dollar and Treasury yields, keeping gold prices around $2,300 per ounce.
In early trading, spot gold fell 0.2% to $2,326.47 per ounce, while gold futures for August delivery dropped 0.1% to $2,335.80 per ounce by 00:29 ET (04:29 GMT).
Gold Remains Muted Ahead of Interest Rate Cues
Gold’s price movement remains constrained as the market anticipates a series of interest rate signals this week. Federal Reserve Chair Jerome Powell is scheduled to speak at a European Central Bank conference later on Tuesday, although he is not expected to provide new guidance on interest rates.
Attention will also be on the minutes of the Fed’s June meeting, due on Wednesday. The minutes come after the central bank downplayed expectations for rate cuts during the meeting. Additionally, Friday’s nonfarm payrolls data will offer more insights into the labor market, a critical factor for the Fed when considering rate cuts.
Despite an increase in market expectations for a rate cut in September, with the CME FedWatch tool indicating nearly a 60% probability of a 25 basis point cut, gold has received little support from this sentiment. High interest rates typically pose a challenge for gold and other precious metals, as they increase the opportunity cost of holding non-yielding assets.
Nevertheless, strong central bank buying, particularly in Asia, has helped gold achieve solid gains so far this year.
Other Precious Metals Also Decline
Other precious metals followed gold’s lead, drifting lower on Tuesday. Platinum futures fell 0.3% to $990.15 per ounce, while silver futures declined 0.1% to $29.582 per ounce.
Copper Prices Sink Amid Weak Sentiment Towards China
In the industrial metals market, copper prices continued to decline due to persistent negative sentiment towards major importer China and concerns over a global economic slowdown. Benchmark copper futures on the London Metal Exchange remained steady at $9,644.50 per tonne after a sharp fall on Monday, while one-month copper futures extended their losses, dropping to $4.4065 per pound.
Mixed purchasing managers index data from China provided conflicting signals about the country’s economic recovery. Market participants are now looking to the Chinese Communist Party’s Third Plenum, a meeting of high-level officials set to take place in July, for further indications on China’s economic direction.
In this environment of economic uncertainty, both precious and industrial metals are reacting to the evolving global economic landscape and the ongoing anticipation of central bank policy decisions.
