Gold Prices Ease as Traders Seek Economic Cues

Gold prices dipped slightly in Asian trading on Monday as traders looked ahead to U.S. Federal Reserve Chair Jerome Powell’s upcoming testimony and key inflation data expected later in the week.

Despite the slight decline, gold prices hovered near one-month highs, edging closer to breaking above $2,400 an ounce. This optimism is driven by growing expectations that the Federal Reserve will start cutting interest rates in September.

Additionally, broader metal prices benefited from a weaker dollar, which reached a near one-month low.

Spot gold fell 0.3% to $2,384.47 an ounce, while gold futures for August delivery dropped 0.2% to $2,392.55 an ounce by 00:33 ET (04:33 GMT).Gold’s recent rise is attributed to increased bets on interest rate cuts.

Over the past week, gold prices surged from the low-$2,300s due to a series of weak labor market readings, culminating in soft nonfarm payroll data last Friday, which significantly boosted gold’s appeal.
Lower interest rates are expected to increase liquidity and reduce the attractiveness of the dollar and Treasuries, further benefiting gold.

According to the CME Fedwatch tool, traders now see over a 72% chance of the Fed cutting rates by 25 basis points in September, up from 59% the previous week.

This week’s focus includes more insights into the U.S. economy and monetary policy. Powell’s two-day testimony before the Senate and House could provide more clarity on the Fed’s interest rate plans.

Additionally, consumer price index (CPI) inflation data is anticipated, which will likely influence the central bank’s rate outlook.Other precious metals also saw declines on Monday, though they retained strong gains from the previous week.

Platinum futures fell 0.6% to $1,039.25 an ounce, while silver futures decreased by 1% to $31.370 an ounce.In the industrial metals market, copper prices showed mixed performance amid ongoing concerns about China, the top importer.

Benchmark copper futures on the London Metal Exchange rose 1% to $9,983.0 a tonne, while one-month copper futures fell 0.9% to $4.6235 a pound.Recent European import tariffs on Chinese electric vehicles have fueled fears of a trade war, impacting copper prices.

Additionally, mixed economic data from China has cast doubt on the country’s economic recovery.Traders are now awaiting Chinese trade and inflation data due later this week.

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