Investing.com — Gold prices fell slightly in Asian trading on Tuesday, extending recent losses as dollar strength on expectations of smaller interest rate cuts put pressure on metal prices.
Industrial metals also retreated, with copper facing continued pressure on concerns about top importer China after Beijing gave mediocre signals on plans for more stimulus. Positive data on copper imports did little to offset this trend.
Broader metals prices have also been mostly negative, posting losses over the past two weeks as signs of resilience in the U.S. economy dampened expectations of outsized interest rate cuts by the Federal Reserve.
fell 0.1% to $2,645.74 per ounce, while the December expiration fell 0.1% to $2,662.10 per ounce at 23:52 ET (03:52 GMT).
Gold trailed peaks as the dollar hit a two-month high
Gold prices remained below their September peaks and struggled to reach new highs under continued pressure from the . The dollar reached a more than two-month high on Monday.
Some hawkish comments from Fed officials also boosted the dollar. Governor Christopher Waller said he supported a cautious stance to cut rates further in coming months, citing recent signs of resilience in the US economy and persistent inflation.
Traders were pricing in a more than 80% chance that the Fed will cut rates by 25 basis points in November, smaller than the bank’s 50 basis point cut showed in September. Traders were also seen positioning for a higher final rate for the Fed.
Higher interest rates do not bode well for gold as they increase the opportunity cost of investing in non-yielding assets. This idea took gold from record highs and also put pressure on other metal prices.
fell 0.6% to $997.65 per ounce, while it fell slightly to $31.302 per ounce on Tuesday.
Copper extends losses as troubles in China persist
The benchmark on the London Metal Exchange fell 0.2% to $9,633.50 per tonne, while December fell 0.5% to $4.3818 per pound.
The red metal posted steep losses over the past two weeks, mainly as top importer China gave mediocre signals on plans for more stimulus. China’s Finance Ministry said it will increase budget spending and debt in coming months but did not specify the scope or timing of the planned measures, disappointing some investors.
This idea caused copper to fall, even as trade data through September showed an increase in Chinese copper imports.
But China’s economy fell more than expected overall, hit by a sharp decline in growth.
