Gold Prices Rise in Asian Trade as Traders Await Fed Signals
Gold prices increased in Asian trade on Tuesday, recovering some of their overnight losses. This came as traders anticipated dovish signals from Federal Reserve Chair Jerome Powell’s upcoming testimony.
Overnight Retreat and Recent Gains
The yellow metal had retreated on Monday but maintained some gains from the previous week. This was due to a series of weak labor market readings, which bolstered expectations for a potential interest rate cut in September. Additionally, a weak dollar supported gold’s rise.
Spot gold rose by 0.4% to $2,367.97 per ounce, while gold futures expiring in August jumped 0.5% to $2,374.40 per ounce by 00:21 ET (04:21 GMT).
Anticipation of Powell’s Testimony
Gold benefitted from increased speculation over an interest rate cut in September, particularly as the dollar weakened. Soft labor market readings led traders to bet that Powell would adopt a dovish tone during his two-day testimony before Congress, set to begin later on Tuesday.
Powell recently noted progress toward disinflation but also stated that the Fed needed more confidence to start cutting rates. Beyond Powell’s testimony, several other Fed officials are also scheduled to speak this week.
Upcoming Economic Data
Key consumer price index (CPI) inflation data is also expected this week and will likely influence the Fed’s outlook on interest rates. Lower interest rates are generally favorable for gold and other precious metals, as they reduce the appeal of the dollar and debt, which tend to perform well in a high-rate environment.
Performance of Other Precious Metals
Other precious metals also rose on Tuesday. Platinum futures increased by 0.7% to $1,022.05 per ounce, while silver futures rose by 1% to $31.218 per ounce. Silver has largely outperformed gold in recent months.
Copper Prices and Economic Cues from China
Among industrial metals, copper prices continued to rise on Tuesday, recovering from steep losses in June. Benchmark copper futures on the London Metal Exchange rose by 0.2% to $9,933.50 per tonne, while one-month copper futures increased by 0.4% to $4.6245 per pound.
Copper traders are focused on upcoming economic data from China, the top importer of copper, with trade and inflation figures expected later this week. However, optimism over China’s economy has waned, leading to steep losses in copper prices through June. Concerns about a potential trade war with the West also kept copper prices relatively subdued.
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