Gold prices rose in Asian trading on Monday, recouping gains after falling for much of July, as attention turned to the Federal Reserve's upcoming meeting, where the central bank is expected to give more clues on interest rate cuts, Investing reports.
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What's happening with gold
The yellow metal was also helped by the weakness of the dollar, which retreated after key inflation data on Friday pointed to some easing of inflation in the US – a scenario that gives the Fed more confidence in cutting borrowing rates.
While gold futures due in December rose 0.4% to $2,395.31 an ounce, those due in December rose 0.5% to $2,440.35 an ounce by 12:58 a.m. ET (04:58 GMT).
Gold strengthens on rate cut bets
The rise in the yellow metal was driven largely by increasing rate cut speculation following encouraging signs last week in the PCE Price Index, the Fed's preferred inflation gauge.
The data put the spotlight on the Fed's meeting this week. The central bank is expected to leave rates unchanged, but any signals about its plans to cut rates will be closely watched.
Traders are almost fully pricing in a 25 basis point rate cut in September, according to CME Fedwatch data.
The prospect of lower rates favors gold as it reduces the opportunity cost of investing in the yellow metal. High rates have undermined gold prices over the past two years, although increased safe-haven demand still helped the yellow metal reach record highs.
Other precious metals rose on Monday, recouping some of their recent losses. Platinum futures rose 0.8% to $953.35 per ounce, and silver futures rose 0.8% to $28.242 per ounce.
Copper rises after serious losses, more signals expected from China
Among industrial metals, copper prices rose on Monday after heavy losses over the past month.
Benchmark future coppers on the London Metal Exchange rose 0.2% to $9,130.50 per tonne, and one-month Copper futures – up 0.4% to $4.1303 per pound.
Prices for the red metal were undermined by growing concerns about main importer China, following a series of weak economic signals and a lack of clarity on stimulus measures economy.
This week the focus will be on key data from the Purchasing Managers' Index on business activity in the country.
- Gold