Investing.com — Gold prices edged lower in Asian markets on Monday as traders awaited further clues on U.S. interest rates from testimony by Federal Reserve Chairman Jerome Powell and the release of key inflation measures this week.
However, bullion prices remained near one-month highs and looked set to rise back above $2,400 an ounce amid growing confidence that the Fed will begin cutting interest rates in September. Broader metals prices also benefited from a weaker dollar, which was near one-month lows.
As of 00:33 ET (04:33 GMT), it was down 0.3% to $2,384.47 an ounce, while August maturities were down 0.2% to $2,392.55 an ounce.
Gold maintains slight gains amid rising expectations of rate cut
Gold surged above the low $2,300 mark last week as a series of weak labor market data stoked optimism for interest rate cuts. The main driver of the gold price increase was Friday’s weak data.
Gold stands to benefit from lower interest rates, which are expected to increase liquidity and make the dollar and Treasury bonds less attractive.
Traders now see more than a 72% chance that the Fed will cut rates by 25 basis points in September, up from 59% last week.
The focus this week will be on further signs of the U.S. economy and monetary policy, with the Fed scheduled to hold two days of testimony before the House and Senate that could shed more light on the central bank’s interest rate plans.
Inflation data is also due to be released this week, which is likely to influence the central bank’s interest rate outlook.
Other precious metals also fell on Monday but maintained their big gains from last week, falling 0.6% to $1,039.25 an ounce and 1% to $31.370 an ounce.
Copper mixed on China concerns
Among industrial metals, copper prices were mixed on Monday as concerns about China, the largest importer, continued to weigh on the price.
The London Metal Exchange benchmark rose 1% to $9,983.0 per tonne, while one-month contracts fell 0.9% to $4.6235 per pound.
Copper prices have fallen in recent weeks on concerns about China, while Europe’s recent imposition of import tariffs on Chinese-made electric vehicles has raised fears of a trade war with Western countries.
China’s middling economic indicators also raised doubts about the country’s economic recovery.
It’s made in China and is due to be released later this week.
