Investing.com — Gold prices fell slightly in Asian trading on Tuesday as rising unrest in the Middle East provided limited support, but the focus remained on potential interest rate cuts from the Federal Reserve.
Gold prices rose on Monday after Israel launched a series of attacks on Rafah in southern Gaza, a move that complicated ongoing ceasefire talks with Hamas. Reports also indicated that ceasefire talks between Israel and Hamas have yielded little progress.
Gold was also supported by weaker-than-expected economic data on Friday, which raised expectations for a U.S. interest rate cut and caused a sharp decline in the dollar. But on Tuesday the US dollar found its footing.
As of 01:14 ET (05:14 GMT), June expiry was steady at $2,330.95 an ounce, falling 0.1% to $2,322.65 an ounce.
Gold expected to see safe haven demand amid tensions between Israel and Hamas
Israel’s attack on Rafah signals an escalation in the ongoing war with Hamas, leaving little room for de-escalation in the Middle East. The move partially boosted demand for safe gold and helped the yellow metal rally above the $2,300 level.
The demand for safe gold is also factored in to some extent by the fact that ceasefire negotiations between the two countries have made little progress.
Still, it remains more than $100 below its all-time high reached in April, when the threat of potential war between Iran and Israel increased demand for safe-haven assets. However, the yellow metal subsequently fell sharply as tensions between the two sides did not turn into a full-fledged conflict.
Focus on interest rate cuts, more Fed speakers awaited
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Last week’s decline has eased, limiting gold’s big gains as markets await further cues on interest rates from the Fed.
In separate speeches, FOMC members Thomas Barkin and John Williams said the central bank still planned to cut interest rates this year, but needed to do more convincing that inflation was easing.
Minneapolis Fed President Neel Kashkari is scheduled to speak later Tuesday.
Other precious metals were mixed in. It rose 0.5% to $971.75 an ounce, while it fell 0.3% to $27.538 an ounce.
Copper prices remain near two-year highs
Among industrial metals, copper prices were mixed on Tuesday, with the focus still on tight supply due to China’s production cuts and sanctions against Russia, with prices still out of sight of two-year highs.
On the London Metal Exchange, it rose 1.1% to $10,044.50 a tonne, but fell 0.2% to $4.5992 a pound.
