Gold prices rise to near $2,400 with focus on Fed, rate cuts
2024.07.29 01:36
Investing.com– Gold prices rose in Asian trade on Monday, recovering more ground from a rout through most of July as focus turned to an upcoming Federal Reserve meeting where the central bank is expected to provide more cues on interest rate cuts.
The yellow metal was also aided by weakness in the dollar, which retreated after key inflation data on Friday pointed to some easing in U.S. inflation- a scenario that gives the Fed more confidence to reduce borrowing rates.
rose 0.4% to $2,395.31 an ounce, while expiring in December rose 0.5% to $2,440.35 an ounce by 00:58 ET (04:58 GMT).
Gold strengthened by rate cut bets
Gains in the yellow metal were driven chiefly by increased speculation over interest rate cuts, following some encouraging signs from data last week, which is the Fed’s preferred inflation gauge.
The reading put this week’s squarely in focus. While the central bank is expected to keep rates unchanged, any signals on its plans to cut rates will be closely watched.
Traders are almost entirely pricing in a 25 basis point cut in September, according to .
The prospect of lower rates bodes well for gold, given that it reduces the opportunity cost of investing in the yellow metal. High rates had battered gold prices over the past two years, although increased safe haven demand still helped the yellow metal hit record highs.
Other precious metals firmed on Monday, also recovering a measure of recent losses. rose 0.8% to $953.35 an ounce while rose 0.8% to $28.242 an ounce.
Copper rises after bruising losses, more China cues awaited
Among industrial metals, copper prices rose on Monday after logging bruising losses over the past month.
Benchmark on the London Metal Exchange rose 0.2% to $9,130.50 a tonne, while one-month rose 0.4% to $4.1303 a pound.
Prices of the red metal were battered by increasing concerns over top importer China, following a series of weak economic signals and lack of regulatory clarity on more stimulus measures.
Focus this week is on key data from the country for more cues on business activity.
