Gold Prices Dip Slightly in Asian Trade, But Stay Near Record Highs Amid Rate Cut Speculation and Weakening Dollar
Gold prices saw a slight decline in Asian trade on Monday, but remained close to the record highs reached last week. The possibility of lower U.S. interest rates has put pressure on the dollar, boosting the outlook for metal markets.
The yellow metal surged to record levels last week, leading gains in metal markets as traders reacted positively to dovish remarks from the Federal Reserve. The ongoing tensions in the Middle East, including limited progress in ceasefire talks between Israel and Hamas, also contributed to the safe haven appeal of gold.
At 00:57 ET (04:57 GMT), gold futures for December delivery fell 0.1% to $2,545.10 an ounce, while spot prices hit a record high of $2,532.05 an ounce last week.
The weakening dollar, which hit a 13-month low, has supported the rise in gold prices. The market anticipates rate cuts by the Fed starting in September, following comments from Fed Chair Jerome Powell signaling the potential for imminent rate reductions.
Lower interest rates are generally beneficial for gold and other precious metals, as they reduce the opportunity cost of holding non-yielding assets. Despite some gains last week, other precious metals like silver and platinum saw a slight retreat on Monday.
In the industrial metals sector, copper prices dipped slightly on Monday after a recent rebound, as concerns about slowing demand from China persist. While lower rates could boost copper demand, the red metal has been recovering from recent lows after hitting record highs in July and August.
Overall, the outlook for gold and other metals remains positive due to the potential for lower interest rates and ongoing geopolitical tensions. Investors should keep an eye on the latest developments in global markets to make informed decisions about their portfolios.
