Gold prices edged lower during Asian trading on Tuesday, maintaining a narrow range as market attention remained fixated on forthcoming signals from the Federal Reserve regarding U.S. interest rates.
The precious metal has seen a modest decline throughout June, pressured by a strengthening dollar and rising Treasury yields. Gold struggled to break free from the $2,300 per ounce mark.
At 00:29 ET (04:29 GMT), spot gold slipped 0.2% to $2,326.47 per ounce, while August gold futures dipped 0.1% to $2,335.80 per ounce.
Federal Reserve’s Impact on Gold
Gold prices continued to trade within a constrained range, with investors awaiting a series of indicators on interest rates scheduled for this week.
Federal Reserve Chair Jerome Powell is scheduled to speak at a European Central Bank conference later today, although expectations for significant new insights on interest rates are muted. The focus then shifts to the release of minutes from the Fed’s June meeting on Wednesday, following a session where expectations for rate cuts were generally subdued.
Market participants are also eyeing the upcoming release of nonfarm payrolls data on Friday, which is anticipated to provide further insights into the robustness of the labor market—a pivotal factor in the Fed’s rate deliberations.
Market Sentiment and Central Bank Activity
Despite recent speculations about a potential rate cut in September, reflected in the CME Fedwatch tool’s projection of a nearly 60% likelihood of a 25 basis points reduction, gold prices found little support. Higher interest rates typically diminish the appeal of non-yielding assets like gold and other precious metals.
However, sustained central bank purchases in Asia have underpinned gold’s performance, contributing to solid gains year-to-date.
Other Precious Metals and Industrial Metals
In parallel, other precious metals saw declines on Tuesday. Platinum futures dropped 0.3% to $990.15 per ounce, while silver futures slipped 0.1% to $29.582 per ounce.
Turning to industrial metals, copper prices continued their decline amid lingering negative sentiment towards China, a major consumer of the metal. Concerns about global economic growth further weighed on prices.
Benchmark copper futures on the London Metal Exchange steadied at $9,644.50 per tonne after Monday’s sharp drop, while one-month copper futures extended losses to $4.4065 per pound.
Mixed signals from China’s purchasing managers index data underscored uncertainty over the country’s economic recovery trajectory.
The upcoming Third Plenum of the Chinese Communist Party, scheduled for July, is expected to offer additional insights into China’s economic policies and outlook.
In conclusion, while gold prices navigate Fed signals, and copper faces headwinds from China, market participants remain attuned to macroeconomic indicators shaping commodity trends globally.