Gold Prices Stable Near Record Highs as Traders Await CPI Data
Gold prices remained steady in Asian trade on Monday, staying close to record highs as investors awaited key inflation data later in the week. The yellow metal experienced volatile swings last week amidst increased market volatility, but ultimately ended the week slightly higher. Gold also saw safe haven demand increase due to concerns over escalating tensions in the Middle East and Ukraine’s offensive against Russia.
Spot gold rose 0.1% to $2,433.62 an ounce, while futures expiring in December held steady at $2,472.20 an ounce. The price of gold was less than $50 away from an all-time high, with further potential gains being held back by the upcoming inflation data release on Wednesday. The data is expected to show a slight cooling in inflation for July, potentially giving the Federal Reserve more confidence to start cutting interest rates. Traders are divided on whether the central bank will opt for a 25 or 50 basis point rate cut in September. Lower interest rates typically benefit gold as they reduce the opportunity cost of holding the precious metal.
In addition to gold, other precious metals were rangebound on Monday, with silver rising 0.2% to $931.40 an ounce and platinum holding steady at $27.595 an ounce.
Meanwhile, copper prices edged slightly higher on Monday after facing significant losses in recent weeks. Market sentiment towards top copper importer China has soured, leading to concerns over a broader economic slowdown that could negatively impact copper demand. Benchmark copper on the London Metal Exchange rose 0.2% to $8,853.50 a ton, while one-month futures rose 0.2% to $3.9912 a pound. Weak economic data from China, including consecutive months of declining copper imports, has contributed to the downward pressure on copper prices.
Looking ahead, more economic data from China is expected this week, including industrial production and retail sales figures on Thursday.
In summary, gold prices remain steady near record highs as investors await key inflation data that could influence the Federal Reserve’s decision on interest rates. Lower rates could be positive for gold, while concerns over economic growth and demand weigh on copper prices. Stay tuned for more updates on these market trends.