Investing.com — Gold prices edged higher in Asian trade on Tuesday, remaining weak as investors remain wary of dollar strength following hawkish U.S. Federal Reserve leanings followed.
Traders also refrained from placing large bets ahead of a shortened trading week due to the Christmas holiday.
By 21:46 ET (02:46 GMT), shares were up 0.2% to $2,631.89 an ounce, up 0.1% by February deadline.
The yellow metal rose 0.3% on Monday after falling more than 1% the previous week, reflecting uncertainty over the metal's outlook.
Bullion under pressure on Fed interest rate outlook
Gold prices were at a one-month low on Wednesday after the Federal Reserve meeting signaled that interest rates will remain high for a long time after Wednesday's rate cut.
Prices have yet to fully recover and remain subdued as investors continue to assess the impact of the Fed's interest rate outlook.
Rising interest rates put downward pressure on gold as the opportunity cost of owning gold increases, making it more attractive compared to interest-bearing assets such as bonds.
Traders now expect a decline of just two quarter points in 2025 as the economy continues to recover and inflation remains high. This compares to four rate cuts expected before the Fed meeting.
Strong dollar puts downward pressure on gold and other metals
The Fed's hawkish stance has given the dollar new strength, as higher interest rates increase returns on dollar-denominated assets and make the dollar more attractive.
The stock rose 0.1% in Asian time on Tuesday, hovering around a two-year high hit last week.
A strong dollar often puts pressure on gold prices, making the yellow metal more expensive for buyers using other currencies.
Other precious metals fell significantly. It rose 0.1% to $951.90 an ounce and rose 0.2% to $30.062 an ounce.
Copper market slumps due to strong dollar and seasonal factors
Among industrial metals, copper prices fell on Tuesday, staying within a narrow range as a strong dollar weighed on the red metal.
Analysts attribute the slump in copper prices to a seasonal slump, as industrial production and construction projects often slow as companies and projects prepare for year-end closures and holidays. I am doing it.
The benchmark price on the London Metal Exchange was almost unchanged at $8,940.50 per tonne, and the one-month contract was also stable at $4.0905 per pound.
