Investing.com — Gold prices rose in Asian trading on Monday, rebounding from a rout for most of July as focus shifted to an upcoming Federal Reserve meeting where the central bank is expected to provide more clues about interest rate cuts.
The yellow metal was also helped by weakness in the dollar, which retreated after key inflation data on Friday pointed to some easing in US inflation – a scenario that gives the Fed more confidence to cut interest rates.
rose 0.4% to $2,395.31 per ounce, while the December expiration rose 0.5% to $2,440.35 per ounce at 00:58 ET (04:58 GMT).
Gold strengthens due to interest rate cuts
Gains in the yellow metal were mainly driven by increased speculation about rate cuts, following some encouraging signs from last week’s data, the Fed’s preferred inflation gauge.
The lecture put the issues of this week in full focus. While the central bank is expected to leave interest rates unchanged, any signals about its plans to cut rates will be closely watched.
Traders are almost fully pricing in a 25 basis point cut in September, according to .
The prospect of lower interest rates bodes well for gold as it lowers the opportunity cost of investing in the yellow metal. High interest rates have negatively impacted gold prices over the past two years, although increased demand for safe havens still pushed the yellow metal to record highs.
Other precious metals firmed on Monday, also recovering as a measure of recent losses. rose 0.8% to $953.35 per ounce, while the price rose 0.8% to $28.242 per ounce.
Copper rises after heavy losses, more Chinese signals were expected
Among industrial metals, copper prices rose on Monday after suffering heavy losses over the past month.
The benchmark on the London Metal Exchange rose 0.2% to $9,130.50 per tonne, while the index rose 0.4% in one month to $4.1303 per pound.
Prices of the red metal have been battered by growing concerns about top importer China, following a series of weak economic signals and a lack of regulatory clarity on more stimulus.
The focus this week is on key data from the country for more clues about business activity.