Gold prices experienced a modest decline during Asian trading on Tuesday but remained near recent highs as investors awaited crucial U.S. inflation data to gauge the Federal Reserve’s potential interest rate cuts.
The yellow metal saw increased demand as a safe haven following a significant risk-off sentiment across global markets last week, driven by concerns over slowing economic growth. Gold prices had approached record highs on Friday but retreated as the U.S. dollar strengthened ahead of this week’s inflation figures.
Spot gold dropped 0.1% to $2,502.07 per ounce, while December gold futures also fell 0.1% to $2,531.00 per ounce as of 00:22 ET (04:22 GMT).
Market attention this week is focused on Wednesday’s Consumer Price Index (CPI) report for insights into the U.S. economy. A cooling inflation rate could boost expectations for lower interest rates in the near future, which would benefit gold. The inflation data is released just a week before a Federal Reserve meeting, where a 25 basis point rate cut is widely anticipated. This expected rate cut is a significant factor behind gold’s recent gains, as lower rates typically reduce the opportunity cost of holding the metal.
In contrast, other precious metals saw declines on Tuesday, lagging behind gold. Platinum futures decreased by 0.1% to $945.00 per ounce, while silver futures fell 0.2% to $28.59 per ounce.
Copper Prices Dip Despite Strong Trade Data from China
In the industrial metals sector, copper prices fell on Tuesday, despite positive trade data from China. The country’s trade balance unexpectedly improved in August due to robust export performance. However, weaker import figures dampened the positive outlook, indicating sluggish domestic demand.
China’s copper imports fell 12.3% year-on-year in August, though they remained positive for the first eight months of the year. This decline, combined with recent weak economic data from China, raised concerns about slowing growth in the world’s largest copper importer. The soft import data and broader risk-off sentiment in global markets have contributed to copper’s recent losses.
