Gold prices registered a slight decline during Asian trading on Tuesday, but remained close to their recent highs as investors awaited key U.S. inflation data, which is expected to impact the Federal Reserve’s interest rate decisions. Gold’s appeal as a safe haven increased following last week’s market volatility, driven by rising concerns over slowing economic growth.
On Friday, spot gold prices neared a record high but retreated as the dollar strengthened ahead of this week’s inflation report. Spot gold dropped by 0.1% to $2,502.07 per ounce, while December gold futures similarly fell by 0.1% to $2,531.00 per ounce.
This week, the market is keenly watching the Consumer Price Index (CPI) data due on Wednesday, expected to provide critical insights into the state of the U.S. economy. Any signs of easing inflation could boost expectations for interest rate cuts, which would directly benefit gold.
The data comes just a week before the Federal Reserve’s meeting, where a 25-basis-point rate cut is widely anticipated. These expectations for a rate cut have played a significant role in pushing gold prices higher recently, as it may pave the way for a new round of monetary easing by the Fed.
As for other precious metals, they also saw notable declines on Tuesday. Both platinum and silver have underperformed compared to gold in recent weeks. Platinum futures dropped by 0.1% to $945.00 per ounce, while silver futures fell by 0.2% to $28.590 per ounce.
In the industrial metals market, copper experienced a significant drop on Tuesday, lacking support from Chinese economic data that had shown some signs of recovery. Despite the unexpected improvement in China’s trade balance for August due to strong exports, weak import numbers raised concerns about sluggish domestic demand.
For instance, copper imports into China fell by 12.3% year-on-year in August, although they remained positive when looking at the data for the first eight months of the year.
These weak figures follow a series of disappointing economic reports from China in recent weeks, heightening worries about slowing growth in the world’s largest copper importer. This combination of negative data and a broader risk-averse sentiment in global markets led to significant losses in copper prices over the past week.
The recent performance analysis of gold and industrial metals shows that investors remain highly cautious, reflecting the volatile nature of financial markets amid ongoing global economic tensions.
