Gold prices saw a modest uptick in Asian trade on Monday, partially recovering from last week’s losses, as traders adopted a cautious stance ahead of a pivotal U.S. inflation reading scheduled for later in the week.
Trading volumes remained subdued due to market holidays in both the UK and the U.S., while uncertainty surrounding U.S. interest rates deterred significant market moves. Meanwhile, copper prices also saw a rebound after experiencing a decline from their record highs last week.
Spot gold increased by 0.4% to reach $2,343.23 per ounce, while gold futures expiring in June rose by a similar margin to $2,344.10 per ounce by 00:33 ET (04:33 GMT). Spot prices were recovering from recent dips but remained below their record highs.
PCE Data and Rate Expectations
Investor focus this week centered on the Personal Consumption Expenditures (PCE) price index data, which serves as the Federal Reserve’s preferred measure of inflation. Scheduled for release on Friday, this data follows a series of warnings from Fed officials regarding persistent inflationary pressures, leading traders to scale back expectations for rate cuts by the central bank this year. As a result, there is now a greater likelihood that the Fed will maintain interest rates unchanged in September, a departure from previous expectations, as indicated by the CME FedWatch tool.
This shift in market sentiment has weighed on gold and broader metal prices in recent weeks, with traders displaying a stronger bias towards the dollar and Treasury securities. Additionally, diminishing safe-haven demand has further subdued gold prices.
Precious and Industrial Metals
Other precious metals also saw gains on Monday, recovering from losses incurred last week. Platinum futures rose by 1.2% to $1,048.70 per ounce, while silver futures increased by 1.7% to $31.023 per ounce.
In the industrial metals sector, copper prices remained relatively steady compared to the previous week’s plunge. One-month copper futures saw a modest rise of 0.3% to $4.7720 per pound, following a speculative surge that drove prices to record highs in May. Market attention now turns to the assessment of physical copper market conditions and the sustainability of supply levels in the coming months.
Moreover, market participants are eagerly awaiting further signals from China, the largest importer of copper, particularly regarding the implementation and funding of recently announced stimulus measures.
