In early Monday trading, gold prices experienced a decline in Asian markets, with limited support stemming from heightened expectations of future U.S. interest rate cuts. Market participants remained on edge, eagerly awaiting signals from the Federal Reserve and developments in the U.S. economy expected later this week.
Throughout June, the price of gold has largely stagnated, failing to gain momentum even as the dollar weakened. Spot gold edged down to $2,325.74 per ounce, while August gold futures dipped by 0.2% to $2,336.05 per ounce as of 00:09 ET (04:09 GMT).
The prospect of a September rate cut gained traction among traders following the release of last week’s PCE price index data. Despite this sentiment, the broader market sentiment towards precious metals, particularly gold, remained subdued.
On Monday, the dollar index declined by over 0.2%, extending losses from the previous session. According to the CME Fedwatch tool, market participants have priced in a nearly 58% probability of a 25 basis point cut in September.
While lower interest rates typically buoy metal markets, gold prices struggled to make significant gains as investors awaited insights from upcoming events, including a speech by Fed Chair Jerome Powell scheduled for Tuesday and the release of minutes from the Fed’s June meeting on Wednesday. Additionally, Friday’s nonfarm payrolls report for June is anticipated to provide further clarity on the economic outlook.
In parallel, other precious metals also trended lower on Monday. Platinum futures fell by 0.5% to $1,004.60 per ounce, while silver futures declined by 0.5% to $29.405 per ounce.
Copper Prices Retreat Amidst Mixed Economic Signals from China
In the industrial metals sector, copper prices extended recent declines on Monday as sentiment towards the metal was dampened by conflicting economic data from China, the world’s largest copper importer.
Benchmark copper futures on the London Metal Exchange decreased by 0.6% to $9,545.50 per tonne, while one-month copper futures slipped by 0.5% to $4.3550 per pound.
Investor sentiment towards China was further muddled this week following the release of conflicting data points. Government figures released on Sunday indicated that China’s manufacturing sector contracted for the second consecutive month according to the official purchasing managers index. Conversely, private data released on Monday suggested the sector experienced its fastest growth rate in three years.
These mixed signals have left traders uncertain about the trajectory of China’s economic recovery, contributing to volatility in copper markets. Concerns over the health of the Chinese economy weighed heavily on copper prices throughout the month of June, resulting in significant losses.
As the week progresses, market participants will continue to monitor developments closely for further insights into the economic landscape and potential implications for metal markets worldwide.
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