Gold prices experienced a slight decline in early Asian trading on Monday, remaining near record highs but seeing limited gains in safe-haven demand following an alleged assassination attempt on former U.S. President Donald Trump.
Amid increased political uncertainty in the U.S., safe-haven buying initially favored the dollar, prompting a modest recovery in the greenback on Monday. However, the dollar’s overall weakness persisted amidst growing expectations of U.S. interest rate cuts, which have buoyed gold prices in recent weeks.
Spot gold edged down by 0.2% to $2,407.49 per ounce, while August gold futures slipped by 0.4% to $2,412.20 per ounce as of 20:34 ET (00:34 GMT).
The political landscape in the U.S. remained uncertain following the attack on Trump during a campaign rally in Butler, Pennsylvania on Saturday. Although Trump sustained a gunshot wound to the ear, he continued to rally supporters with a call to action.
Initially expected to support safe-haven assets like gold, the heightened political tensions did not unfold as anticipated. Instead, the dollar received some inflows, leading to a retreat in the price of gold after the incident.
Analysts suggested that the attack might bolster Trump’s electoral prospects against Democratic frontrunner Joe Biden later this year. A potential Trump presidency could potentially increase inflation and debt, typically strengthening the dollar.
The greenback rose approximately 0.2% against a basket of currencies, although it had been grappling with significant losses over the past two weeks.
Traders approached gold cautiously, considering its proximity to a record high of $4,050 per ounce earlier this year. Historically, gold has often experienced sharp declines after reaching brief record highs.
Gold and other precious metals had benefitted from heightened speculation over potential interest rate cuts by the Federal Reserve, fueled by soft consumer price index inflation data last week. This sentiment had contributed to weakening the dollar.
Meanwhile, other precious metals saw minor declines on Monday, with platinum futures down 0.6% to $1,007.65 per ounce and silver futures slipping 0.9% to $30.890 per ounce.
In the industrial metals sector, copper prices also declined on Monday, extending losses from the previous week amid ongoing concerns about China’s economic slowdown. Data released on Friday indicated a decline in China’s copper imports for June, raising doubts about domestic demand.
Benchmark copper futures on the London Metal Exchange fell by 0.4% to $9,841.50 per tonne, while one-month copper futures dropped 0.4% to $4.5633 per pound.
Investors are now closely watching for key Chinese gross domestic product data for the second quarter, expected later on Monday, which is anticipated to reveal a cooling in economic growth, further dampening copper demand prospects.
