Investing.com — Gold prices were slightly lower at the start of Asian trading on Monday, holding near record highs but seeing little boost in safe-haven demand following the alleged assassination attempt on former U.S. President Donald Trump.
The dollar recovered some of its recent losses on Monday as safe-haven buying supported it amid growing political uncertainty in the United States, but it remains weak amid growing expectations of a U.S. interest rate cut that has boosted gold in recent weeks.
As of 20:34 ET (00:34 GMT), it was down 0.2% to $2,407.49 an ounce, while August maturities were down 0.4% to $2,412.20 an ounce.
US political uncertainty rises after Trump attacks
Markets are still struggling with the uncertain political outlook in the US following an assassination attempt on President Trump at a campaign rally in Butler, Pennsylvania on Saturday.
The gunman fired a shot at Trump, hitting him in the ear, but Trump was still seen urging his supporters to “fight!”
Initially, it was expected that the rising political uncertainty following the attacks would boost safe haven investment in gold, but this scenario did not play out as expected, with gold falling sharply following the attacks, while the dollar benefited from inflows.
Analysts have speculated that the attack may increase the chances of Trump defeating Democratic front-runner Joe Biden later this year. A Trump presidency could lead to higher inflation and debt, scenarios that would normally lead to a stronger dollar.
The U.S. dollar strengthened about 0.2% against a basket of major currencies after suffering steep losses over the past two weeks.
Traders were somewhat cautious about gold, which traded at a record high of nearly $4,050 an ounce earlier this year. Historically, gold has always fallen sharply after hitting short-term record highs.
Gold, like other metals markets, has benefited greatly from growing speculation about a Federal Reserve interest rate cut. Weak consumer price inflation figures last week have encouraged traders to believe the Fed will cut rates by 25 basis points in September, weighing on the dollar.
Other precious metals also fell on Monday, seeing little demand as immediate safe havens.
It fell 0.6% to $1,007.65 an ounce and 0.9% to $30.890 an ounce.
Copper falls slightly amid China worries ahead of GDP data release
Among industrial metals, copper prices fell on Monday, extending losses from last week on lingering concerns about China, the largest importer.
Data on Friday showed that Chinese gold imports fell in June, raising questions about domestic demand.
The London Metal Exchange’s benchmark price was down 0.4 percent to $9,841.50 a tonne, while one-month contracts were down 0.4 percent to $4.5633 a pound.
All eyes are now on headline Chinese second-quarter data due to be released later on Monday, which is expected to show slowing growth, boding badly for copper demand.
