Investing.com — Gold prices moved little in Asian trading on Tuesday, stabilizing after falling from record highs as traders factored in the prospect of smaller interest rate cuts from the Federal Reserve.
Among industrial metals, copper prices fell sharply as Chinese markets reopened after a week-long holiday, while Beijing’s plans to implement recently announced stimulus measures disappointed.
The focus this week has been on more signals from the Fed, as well as key inflation data that will likely play a role in the interest rate outlook.
Gold prices soared to record highs in September after the Fed cut rates by 50 basis points and initiated an easing cycle. But doubts over the future pace of central bank rate cuts caused the yellow metal to retreat.
The strength of the dollar – which reached a seven-week high in recent sessions – also weighed on metals markets.
was steady at $2,642.86 per ounce, while the December expiration fell 0.2% to $2,661.70 per ounce.
Gold Nurses Fall From Record Highs; More course indications were expected
The yellow metal fell from record highs last week, with the focus now turning to more signals on interest rates.
Much of gold’s losses came after stronger-than-expected data on Friday saw traders dramatically scale back their expectations for future rate cuts.
Traders had estimated about an 81% chance of a 25 basis point cut in November, and a 19% chance of unchanged interest rates.
The focus this week was on the minutes of the Fed’s September meeting to better understand its prospects for future rate cuts, as the bank predicts a largely data-driven approach.
Figures due later this week are expected to provide more clues about inflation, while also taking into account the Fed’s outlook.
While lower interest rates bode well for metals markets, a slower pace of cuts makes non-performing assets look less attractive in the short term.
Other precious metal prices also fell on Tuesday. fell 0.8% to $977.50 per ounce, while the price fell 1.1% to $31,660 per ounce.
Copper falls as Chinese stimulus cheers wane
Among industrial metals, copper prices fell sharply on Tuesday as markets in mainland China opened following a week-long holiday.
The benchmark on the London Metal Exchange fell 1.5% to $9,800.50 per tonne, while the index fell 1.9% in one month to $4.4697 per pound.
Copper initially benefited from optimism about China after Beijing announced a slew of major stimulus measures in late September. China is the world’s largest importer of copper.
But this momentum ran out of steam on Tuesday, especially as the Chinese government presented disappointing plans for how it plans to implement the stimulus measures.
