Investing.com — Gold prices fell slightly in Asian trading on Tuesday, but remained near recent highs as traders awaited key U.S. inflation data for more clues about the Federal Reserve’s plans to cut interest rates.
The yellow metal benefited from safe-haven buying following a serious risk shift in markets last week, triggered by concerns over slowing economic growth.
Spot prices came within striking distance of a record high on Friday but then retreated as inflation progressed ahead of this week’s inflation figures.
fell 0.1% to $2,502.07 per ounce, while the December maturity at 00:22 ET (04:22 GMT) fell 0.1% to $2,531.0 per ounce.
Gold stable with inflation, Fed meeting in sight
The focus this week is squarely on inflation data, due Wednesday, for more signals about the US economy.
Any sign of cooling inflation is likely to lead to more bets on lower interest rates in the coming months – a scenario that bodes well for gold.
Wednesday’s inflation figures come just a week ahead of , with the central bank widely expected to cut rates by 25 basis points.
Expectations of September’s rate cut were also a key driver of the recent rise in gold prices, as the rate cut is likely to trigger a Fed easing cycle.
Lower interest rates bode well for gold as they lower the opportunity cost of investing in the yellow metal.
Other precious metals fell on Tuesday after largely lagging gold in recent weeks. fell 0.1% to $945.0 per ounce, while the price fell 0.2% to $28,590 per ounce.
Copper edges lower, Chinese trade data provides little cheer
In industrial metals, prices fell on Tuesday, getting little support from data showing some economic resilience in top importer China.
The Chinese price unexpectedly rose in August thanks to the country’s strong position. But laggards offset the happiness over this trend as it was a sign of sluggish demand in the country.
Total Chinese copper imports contracted 12.3% year-on-year in August, although they were still in positive territory in the first eight months of the year.
The soft import data followed a series of weak data on China’s economy last week, raising concerns about slowing growth in the world’s top copper importer.
The data, coupled with a broader risk exit in global markets, sent copper posting steep losses over the past week.
