Gold Prices Weaken in Asian Trade Amidst Expectations of U.S. Interest Rate Cuts

Gold prices weakened in Asian trade on Monday, as the precious metal struggled to gain momentum despite increased expectations of U.S. interest rate cuts. Spot gold fell slightly to $2,325.74 an ounce, while gold futures for August also dipped by 0.2% to $2,336.05 an ounce.

The dollar index sank over 0.2% on Monday, providing some support for gold prices. Traders are now pricing in a nearly 58% chance for a 25 basis point rate cut in September, according to the CME Fedwatch tool. However, despite the prospect of lower rates, gold prices remained within a tight trading range established in June.

Investors are eagerly awaiting cues from the Federal Reserve and the U.S. economy this week. Fed Chair Jerome Powell is scheduled to speak on Tuesday, while the minutes of the Fed’s June meeting will be released on Wednesday. Additionally, nonfarm payrolls data for June is due on Friday, adding to the anticipation in the markets.

In the broader metals market, platinum futures fell 0.5% to $1,004.60 an ounce, while silver futures also declined by 0.5% to $29.405 an ounce. The lackluster performance of precious metals reflects the cautious sentiment prevailing among traders.

Meanwhile, copper prices retreated on Monday, extending recent losses as concerns over China’s economic health weighed on the industrial metal. Benchmark copper futures on the London Metal Exchange fell 0.6% to $9,545.50 a tonne, while one-month copper futures dropped by 0.5% to $4.3550 a pound.

Mixed economic readings from China added to the uncertainty surrounding copper prices. While official purchasing managers index data showed a contraction in the country’s manufacturing sector for the second consecutive month, private data released on Monday indicated growth at its fastest pace in three years. This conflicting information kept traders on edge about the state of the world’s largest copper importer.

Overall, the metals market is facing a challenging environment with conflicting signals from the U.S. economy and China. The upcoming events, including Fed speeches and economic data releases, will likely provide more clarity on the direction of gold and copper prices in the coming days.

In conclusion, the subdued performance of gold and copper reflects the cautious stance of investors amid uncertainties in the global economy. Traders are closely monitoring developments in the U.S. and China to gauge the future trajectory of metal prices.