Gold Prices Stabilize as Traders Await Federal Reserve Meeting
Gold prices remained relatively stable in Asian trading on Tuesday, hovering around 11-day lows as market participants awaited more clarity on U.S. political developments and upcoming monetary policy decisions. The precious metal saw a modest rise, with spot gold up 0.1% to $2,398.38 per ounce, and gold futures increasing by 0.2% to $2,399.40 per ounce as of 00:33 ET (04:33 GMT).
The yellow metal is coming off a significant decline from record highs reached earlier this month, when spot prices surged to approximately $2,470 an ounce. Recent fluctuations have been influenced by uncertainties surrounding U.S. politics and economic speculation, particularly with regard to potential interest rate cuts by the Federal Reserve. The upcoming Fed meeting next week is expected to keep rates steady, though there is growing optimism that cuts may begin in September.
Political developments have added to market volatility. The uncertainty intensified this week following President Joe Biden’s withdrawal from the presidential race and his endorsement of Vice President Kamala Harris. Harris is anticipated to secure the Democratic nomination, although this has not yet been formally confirmed. Meanwhile, polling data from CBS and HarrisX indicates that former President Donald Trump is leading in the polls, though the impact of Biden’s withdrawal has yet to be fully reflected.
Despite some safe-haven inflows into gold driven by political uncertainty, a stronger dollar has tempered these gains. The dollar’s resilience, coupled with speculation about a Trump presidency, has contributed to gold’s recent price pressures.
Industrial Metals Face Pressure from China’s Economic Outlook
In the industrial metals sector, copper prices continued to fall amid growing economic concerns related to China, the world’s top copper importer. Benchmark copper futures on the London Metal Exchange rose slightly by 0.2% to $9,234.50 per tonne, while one-month copper futures dropped 0.3% to $4.1873 per pound. Both contracts have reached over three-and-a-half-month lows due to deteriorating sentiment towards China’s economic prospects.
Recent data from China revealed a slowdown in economic growth for the second quarter. An unexpected interest rate cut by the People’s Bank of China on Monday failed to bolster market confidence. Additionally, the recent Third Plenary session of the Chinese Communist Party provided limited details on future economic support measures, further dampening sentiment.
Concerns about stricter U.S. monetary policy, should Trump be elected, have also contributed to caution among traders of China-exposed assets. This uncertainty is weighing on copper prices, highlighting the broader economic anxiety impacting industrial metals.
Other Precious Metals Decline
Other precious metals saw declines on Tuesday, with platinum futures falling 0.1% to $959.65 per ounce and silver futures dropping 0.5% to $29.188 per ounce. These declines follow the broader trend in precious metals, influenced by the mixed signals from global economic and political developments.
