Gold Prices Update

Gold prices fell slightly in Asian trade on Wednesday as the dollar recovered from 13-month lows. The focus remains on key upcoming inflation data for cues on interest rates.

However, the yellow metal stayed near peaks achieved this month, driven by geopolitical concerns that bolstered safe haven demand, alongside expectations of lower U.S. interest rates that kept gold in demand.

• Spot gold decreased by 0.5% to $2,512.88 per ounce.
• Gold futures for December dropped by 0.2% to $2,547.60 per ounce by 00:37 ET (04:37 GMT).
• Last week, spot prices reached a record high of $2,532.05 an ounce.

Gold Stalls as Dollar Recovers; PCE Data on Tap

Gold was pulled back from record highs as the dollar bounced from 13-month lows. Despite this, gold retained most of its gains as the dollar’s recovery was limited by ongoing expectations that the Federal Reserve will start cutting interest rates from September.

Comments from Fed officials have supported the speculation, as traders remain divided over whether there will be a 25 or 50 basis point cut, according to CME Fedwatch.

The PCE price index data, which is the Fed’s preferred inflation measure, is scheduled for release this Friday and is expected to provide more insights on interest rate direction.

Lower interest rates are favorable for gold as they diminish the opportunity cost of investing in non-yielding assets. This sentiment also benefited flows into other precious metals, although they have been lagging behind gold in recent months.

• Platinum futures fell by 0.8% to $959.40 an ounce.
• Silver futures declined by 0.5% to $30.280 an ounce.

Copper Pulls Back as Rebound Stalls, China Concerns Grow

In the realm of industrial metals, copper prices declined on Wednesday as the recent rally cooled down, compounded by fresh worries regarding China’s economic situation.

• Benchmark copper futures on the London Metal Exchange decreased by 0.6% to $9,370.50 per ton.
• One-month copper futures dropped by 0.7% to $4.2715 per pound.

Copper prices had surged in the past month, rebounding from multi-month lows in July amid ongoing concerns regarding slow demand. These worries resurfaced this week after Canada imposed heavy trade tariffs on China’s electric vehicle sector, aggravating tensions with Beijing.

Traders are anxious about the possibility of a renewed trade conflict between China and the West, which could hinder China’s already sluggish economic recovery and diminish its copper demand. Given that the EV sector is a significant source of copper demand, these fears loom large.