Investing.com– Gold Prices Decline

Gold prices fell slightly in Asian trade on Tuesday, continuing recent losses as a strong dollar, driven by expectations of smaller interest rate cuts, pressured metal prices.

Industrial Metals Retreat

Industrial metals also retreated, with copper experiencing continued pressure from concerns regarding top importer China, following Beijing's lackluster signals on further stimulus. Positive copper import data did little to alleviate the downward trend.

Broader metal prices were predominantly negative, enduring losses over the past fortnight as signs of resilience in the U.S. economy dampened expectations for significant interest rate cuts by the Federal Reserve.

Spot gold decreased by 0.1% to $2,645.74 an ounce, while December gold futures also dropped by 0.1% to $2,662.10 an ounce by 23:52 ET (03:52 GMT).

Gold's Struggle Amid Dollar Strength

Gold prices remained below their September peaks, failing to achieve new highs due to persistent pressure from the dollar, which reached a two-month high on Monday.

Hawkish comments from Fed officials further bolstered the dollar. Governor Christopher Waller expressed support for a cautious approach to further rate cuts in the upcoming months, citing recent resilience in the U.S. economy and ongoing inflation concerns.

Traders were pricing in an over 80% chance that the Fed would cut rates by 25 basis points in November, a smaller reduction than the 50 bps cut in September, as shown by CME Fedwatch. Investors were also positioning for a higher terminal rate for the Fed.

Higher rates negatively affect gold, as they increase the opportunity cost of investing in non-yielding assets. This concept pulled gold from its record highs and also pressured other metal prices.

Platinum futures decreased by 0.6% to $997.65 an ounce, while silver futures fell slightly to $31.302 an ounce on Tuesday.

Copper’s Continued Decline Amid China's Challenges

Benchmark copper futures on the London Metal Exchange fell 0.2% to $9,633.50 a ton, with December copper futures declining 0.5% to $4.3818 a pound.

The red metal has been experiencing significant losses over the past two weeks, particularly as top importer China provided ambiguous cues on plans for additional stimulus. The Ministry of Finance indicated that it would increase fiscal spending and debt in the coming months but did not outline the specifics, disappointing some investors.

Despite trade data showing a rise in Chinese copper imports through September, copper prices continued to decline following a larger-than-expected drop in China’s overall trade balance, attributed to a significant decline in export growth.