Gold Prices Rise in Asian Trade

Gold prices rose in Asian trade on Monday, recovering from a rout throughout July. The focus shifted towards an upcoming Federal Reserve meeting, where the central bank is expected to provide more clues on interest rate cuts.

The yellow metal’s rise was supported by a weakened dollar, which retreated after key inflation data released on Friday indicated some easing in U.S. inflation. This scenario gives the Fed confidence to reduce borrowing rates.

• Spot gold increased by 0.4% to $2,395.31 an ounce
• December gold futures climbed 0.5% to $2,440.35 an ounce (as of 00:58 ET / 04:58 GMT).

Gold Strengthened by Rate Cut Bets

The gains in gold were primarily driven by increased speculation over interest rate cuts following positive signs from the PCE price index data last week, the Fed’s preferred inflation gauge. This week’s Fed meeting is a focal point; while the central bank is predicted to maintain rates, any signals regarding potential cuts will be closely scrutinized.

Traders are almost fully pricing in a 25 basis point cut in September, according to CME Fedwatch. The anticipation of lower rates is advantageous for gold, as it diminishes the opportunity cost of investing in the precious metal. High rates previously hurt gold prices over the past two years, although a rise in safe haven demand contributed to record high prices.

Other precious metals firmed on Monday, recovering some of their recent losses:
– Platinum futures rose 0.8% to $953.35 an ounce
– Silver futures increased 0.8% to $28.242 an ounce.

Copper Rises After Losses; More China Cues Awaited

In industrial metals, copper prices increased on Monday after experiencing significant losses over the past month.
– Benchmark copper futures on the London Metal Exchange rose 0.2% to $9,130.50 a tonne.
– One-month copper futures up 0.4% to $4.1303 a pound.

Copper’s prices had been pressured by growing concerns surrounding top importer China, following a series of weak economic indicators and a lack of regulatory clarity regarding additional stimulus measures. Focus this week is on key purchasing managers index data from China for insights into business activity.