Gold prices climb, yet remain below record levels due to ongoing dollar strength

Gold prices rose in Asian trading on Monday but stayed significantly below recent record highs due to the continued strength of the dollar, which exerted downward pressure on metal markets.

Investors remained heavily inclined towards the dollar, anticipating further cues on U.S. inflation and interest rates. However, metal markets witnessed some buying activity after experiencing steep losses on Friday.

Spot gold edged up 0.2% to $2,169.77 per ounce, while gold futures expiring in April gained 0.5% to $2,170.55 per ounce by 01:13 ET (05:13 GMT).

Gold prices recover slightly as dollar maintains strength

 Bullion prices were trading well below the record highs reached last week, fueled by signals of potential interest rate cuts from the Federal Reserve, which led to strong gains in the yellow metal.

But gold sharply declined from record highs towards the end of the week, as dovish signals from other central banks prompted investors to pivot largely into the dollar, which stands out as the only high-yielding, low-risk currency.

The dollar index climbed 0.4% on Monday to reach a one-month high. Dollar strength was further fueled by anticipation surrounding the release of the PCE price index data, the Fed’s preferred inflation gauge, scheduled for later this week. Additionally, remarks from several Fed officials throughout the week also contributed to the dollar’s momentum.

On Monday, other precious metals showed mixed performance after significant declines in the previous session. Platinum futures saw a 0.6% increase, reaching $913.40 per ounce, while silver futures dipped slightly by 0.1% to $24.812 per ounce.

Copper prices bounce back, but shy away from 11-month highs

On Monday, copper prices rebounded sharply after experiencing steep losses in the previous session. However, despite the rebound, copper prices remained below the 11-month highs reached last week.

Three-month copper futures on the London Metal Exchange climbed 0.6% to $8,911.0 per ton, while one-month U.S. copper futures increased 0.8% to $4.0315 per pound.

Copper prices retreated from 11-month highs last week after Friday’s data hinted that global copper supplies might not be as constrained as previously anticipated. The recent surge in copper was primarily fueled by expectations of reduced supplies following indications from major Chinese refiners about production cuts.

However, Chinese data released on Friday revealed that copper inventories in the country had surged to their highest levels in four years in recent months. This suggests that supplies in the world’s largest copper importer, China, remain ample, tempering some of the earlier supply concerns that had propelled copper prices higher.

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