Gold Prices Slip in Asian Trade Amid Uncertainty Over U.S. Interest Rates

Gold prices fell slightly in Asian trade on Tuesday, remaining in a tight trading range as anticipation of a slew of cues on U.S. interest rates kept traders largely averse towards metal markets. The yellow metal was nursing a fall through June, as fears of high U.S. interest rates pushed up the dollar and Treasury yields, keeping gold stuck around $2,300 an ounce.

Spot gold fell 0.2% to $2,326.47 an ounce, while gold futures expiring in August fell 0.1% to $2,335.80 an ounce by 00:29 ET (04:29 GMT).

Gold remained rangebound with focus largely on a slew of cues on interest rates due this week. Federal Reserve Chair Jerome Powell is set to speak at a European Central Bank conference later on Tuesday, although he is unlikely to provide any new cues on interest rates. The minutes of the Fed’s June meeting are due on Wednesday, coming after the central bank largely downplayed expectations for rate cuts during the meeting. Nonfarm payrolls data is due on Friday, offering more cues on the labor market, a key consideration for the Fed in cutting rates.

Gold took little support from a recent increase in expectations for a September rate cut, with traders pricing in a nearly 60% possibility the Fed will cut rates by 25 basis points. High rates bode poorly for gold and other precious metals, given that they increase the opportunity cost of investing in non-yielding assets. However, increased central bank buying, especially in Asia, kept gold sitting on strong gains so far in the year.

Other precious metals drifted lower on Tuesday, with platinum futures falling 0.3% to $990.15 an ounce, and silver futures falling 0.1% to $29.582 an ounce.

Among industrial metals, copper prices sank further on Tuesday as sentiment towards major importer China remained largely negative. Benchmark copper futures on the London Metal Exchange steadied at $9,644.50 a tonne, after falling sharply on Monday, while one-month copper futures extended losses, falling to $4.4065 a pound. Concerns over a slowdown in global economic growth weighed heavily on prices, with mixed purchasing managers index data from China offering differing cues on an economic recovery in the country.

The Chinese Communist Party’s upcoming Third Plenum is set to offer more cues on the country’s economic outlook. Overall, the global economic landscape remains uncertain, with various factors influencing the direction of metal markets.

In conclusion, the outlook for gold and other metals remains uncertain as traders await key cues on U.S. interest rates and economic data. The impact of high rates, central bank actions, and global economic sentiment will continue to shape the trajectory of metal prices in the coming days. Investors should closely monitor developments in the market to make informed decisions regarding their investment strategies.