Investing.com — Gold prices fell in Asian trading on Tuesday but remained near record highs as safe-haven demand was boosted by fears of an Iranian attack on Israel.
Markets also turned off risk ahead of key US inflation data this week, which is likely to play a role in the outlook for rate cuts.
Gold also remained bullish on the prospect of interest rate cuts in the US, with softer inflation widely expected to favor this idea.
fell 0.4% to $2,460.78 per ounce, while the December maturity at 00:56 ET (04:56 GMT) fell 0.1% to $2,501.45 per ounce. Gold futures hit a record high of $2,517.10 per ounce, while spot prices remained within sight of a record high of $2,483.78 per ounce.
The fear between Iran and Israel keeps the demand for safe havens high
Gold benefited from demand for safe havens as media reports suggested Iran could launch an attack on Israel as soon as this week.
The attack is likely to be in retaliation for the recent killing of a Hamas leader in Iran, and comes as Israel continues its offensive in Gaza.
Uncertainty about the scale of the attack and the threat that it could spark all-out war in the Middle East were the main drivers behind demand for gold as a safe haven.
CPI, economic data awaited more interest rate guidance
The focus this week was entirely on data from the US, which will be released on Wednesday. Inflation is expected to decline slightly in July.
If there are further signs that inflation is cooling, the Federal Reserve will have more impetus to cut rates, especially as fears grow that the U.S. economy is heading for a recession.
Markets are divided between a 25 and 50 basis point cut in September, with Wednesday’s inflation data likely to provide more insight into the possible cut.
In addition to inflation data, this week’s figures will also provide more clues about the world’s largest economy.
Broader precious metals prices fell on Tuesday but made some gains this week. fell 0.7% to $942.60 per ounce, while the price fell 0.8% to $27.773 per ounce.
Copper under pressure, more Chinese signals awaited
Among industrial metals, copper prices fell on Tuesday and remained under pressure due to ongoing concerns about top importer China.
The benchmark on the London metals exchange fell 0.7% to $8,963.50 per tonne, while the index fell 0.7% in one month to $4.0418 per pound.
The focus this week is on data from China, due Thursday, for economic signals on the world’s largest copper importer.
The figures come after a slew of disappointing data from the country increased concerns about copper appetite.
