Investing.com — Gold prices fell in Asian markets on Tuesday, remaining stuck in a narrow trading range in the low $2,300s as a recent strengthening of the dollar and expectations of a key inflation reading made traders cautious about the metal.
Metals markets saw limited relief from the greenback’s overnight fall as the dollar remained popular amid uncertainty over U.S. interest rates.
As of 00:10 ET (04:10 GMT), it was down 0.4% to $2,325.56 an ounce and down 0.3% to $2,337.35 an ounce.
Gold remains near $2,300 as inflation data released
Gold has fallen to a trading range of low $2,300 an ounce over the past week as traders grew uncertain about the outlook for U.S. interest rate cuts this year.
May inflation data was somewhat stronger but still points to relatively strong upward pressure on prices. An unexpectedly strong June purchasing managers’ index also raised concerns that the strength of the U.S. economy could keep interest rates high for an extended period of time.
Much of the focus this week is on data from the Federal Reserve’s key inflation gauge, due for release on Friday, which is widely expected to show inflation slowing slightly but still well above the central bank’s 2% target for the year.
Higher interest rates bode poorly for metals markets as they increase the opportunity cost of investing in non-yielding assets.
Other precious metals were mixed on Tuesday but were within recently established trading ranges, rising 0.4% to $1,016.55 an ounce and declining 0.1% to $29.817 an ounce.
Copper prices rise, but China worries sway sentiment
Among industrial metals, copper prices rose on Tuesday, recovering slightly from recent declines.
But sentiment towards gold was hampered by concerns about China, its largest importer, whose government is facing steep import tariffs on Chinese electric vehicles, raising the possibility of a trade war with the European Union and the United States.
The London Metal Exchange benchmark rose 0.4% to $9,703.50 a tonne, while one-month contracts rose 0.5% to $4.4413 a pound.
Both contracts have been falling sharply in recent weeks as sentiment toward China has worsened and doubts have emerged about the prospects for a global economic recovery this year.
