Gold Prices Dip Slightly in Asian Trade as Investors Await U.S. Inflation Data
Gold prices in Asian trade saw a slight decrease on Tuesday, but remained near recent highs as investors eagerly awaited key U.S. inflation data to gain insight into the Federal Reserve’s plans regarding interest rate cuts.
The yellow metal experienced a boost from safe haven buying following a significant risk-off movement across markets last week, which was prompted by concerns over slowing economic growth.
Spot prices came close to hitting a record high on Friday but then retraced slightly as the market prepared for this week’s inflation data release.
Gold futures fell 0.1% to $2,502.07 per ounce, while spot gold expiring in December dropped 0.1% to $2,531.0 per ounce by 00:22 ET (04:22 GMT).
Focus for the week is primarily on the inflation data set to be released on Wednesday, which will provide more clues on the state of the U.S. economy.
Any signs of cooling inflation are likely to lead to increased bets on future interest rate cuts in the upcoming months, a scenario that is favorable for gold prices.
Lower interest rates generally benefit gold as they reduce the opportunity cost of holding the precious metal.
In addition to gold, other precious metals experienced declines on Tuesday, with silver falling 0.1% to $945.0 per ounce and platinum dropping 0.2% to $28.590 per ounce.
On the industrial metals front, copper prices retreated on Tuesday despite some positive economic data from top importer China, where exports unexpectedly grew in August.
However, the disappointing import data, along with other weak readings on China’s economy over the past week, raised concerns about slowing growth in the world’s largest copper importer.
Overall, the market is eagerly anticipating the U.S. inflation data release and the upcoming Federal Reserve meeting, as these events are likely to have a significant impact on gold and other metal prices in the near future.