Investing.com — Gold prices edged lower in Asian markets on Wednesday as the dollar recovered from a 13-month low, but attention was focused on upcoming key inflation data for further clues on interest rates.
But gold remains on track to hit a record high this month as geopolitical worries boost demand as a safe-haven asset and the prospect of lower U.S. interest rates.
As of 00:37 ET (04:37 GMT), it was down 0.5% at $2,512.88 an ounce, while the December contract was down 0.2% at $2,547.60. Spot prices hit a record high of $2,532.05 an ounce last week.
Gold stalls as dollar recovers; PCE data due for release
Gold has rebounded from a 13-month low earlier this week and has fallen from record highs.
However, gold still managed to retain much of its gains, while the dollar's recovery was limited amid persistent expectations that the Federal Reserve will begin cutting interest rates from September.
Recent trading showed that dovish comments from Fed officials have bolstered this thinking, with traders split on whether to go for a 25 basis point or a 50 basis point cut.
Inflation data, the Fed's go-to inflation measure, is due to be released this Friday and will provide further clues about the direction of interest rates.
Lower interest rates bode well for gold given the reduced opportunity cost of investing in non-yielding assets. This thinking has also favored inflows into other precious metals, but they have lagged gold's rally by a large margin over the past month.
It fell 0.8% to $959.40 an ounce and 0.5% to $30.280 an ounce.
Copper falls as recovery stalls, China concerns grow
Among industrial metals, copper prices fell on Wednesday as a rally in the metal cooled and renewed concerns about China, the largest importer, further depressed prices.
The London Metal Exchange's benchmark price fell 0.6 percent to $9,370.50 a tonne, while one-month contracts fell 0.7 percent to $4.2715 a pound.
Copper prices have surged over the past month, rebounding from multi-month lows hit in July amid ongoing concerns about slowing demand.
Those concerns resurfaced this week after Canada imposed steep trade tariffs on China's electric vehicle sector, angering Beijing.
Traders are concerned that a renewed trade war between China and the West could deal a further blow to China's faltering economic recovery and dampen demand for copper.
The EV sector is also a significant source of copper demand.
