Gold Prices Dip but Remain Near Record Highs

Gold prices fell in Asian trade on Tuesday but remained close to record highs due to safe haven demand amid fears of an Iranian strike against Israel.

Markets turned risk-off ahead of key U.S. inflation data this week, potentially impacting the outlook for interest rate cuts. Softer inflation readings are expected, supporting the prospect of U.S. interest rate cuts.

• Spot gold fell 0.4% to $2,460.78 an ounce.
• Gold futures for December decreased 0.1% to $2,501.45 an ounce.
• Gold futures previously hit a record high of $2,517.10 an ounce.
• Spot prices approached a record high of $2,483.78 an ounce.

Iran-Israel Fears Elevate Safe Haven Demand

Gold benefits from safe haven demand as reports indicate Iran may launch a retaliatory strike against Israel this week. This tension arises from recent events, including the killing of a Hamas leader in Iran, amidst ongoing Israeli operations in Gaza.

The uncertainty regarding the scale of the potential attack and its potential to ignite a larger conflict in the Middle East drives demand for gold.

CPI and Economic Data Awaited for Rate Cues

This week’s focus is on the U.S. consumer price index (CPI) data due Wednesday, which is expected to show slight easing in July inflation. Further cooling inflation may motivate the Federal Reserve to cut interest rates, especially with recession fears mounting.

Market speculation centers on a 25 to 50 basis point cut in September, with Wednesday’s data expected to provide clarity. Additionally, industrial production and retail sales figures will yield more insights into the U.S. economy.

Broader Precious Metal Prices

On Tuesday, broader precious metal prices declined but held earlier gains for the week.
– Platinum futures fell 0.7% to $942.60 an ounce.
– Silver futures dropped 0.8% to $27.773 an ounce.

Copper Prices Under Pressure, Awaiting China Data

Copper prices suffered a decline on Tuesday amid persistent concerns regarding China’s economic activity.
– Benchmark copper futures on the London Metal Exchange fell 0.7% to $8,963.50 a ton.
– One-month copper futures saw a 0.7% drop to $4.0418 a pound.

Attention this week is on China’s industrial production and retail sales data due Thursday, especially following disappointing recent data raising concerns over China’s copper demand.