Gold Prices Hover Around $2,400; Copper Hit by China Concerns

Gold prices remained steady in Asian trading on Tuesday, staying near 11-day lows as traders await clarity on U.S. political developments and the Federal Reserve’s upcoming policy meeting. Meanwhile, copper prices continued to decline due to ongoing economic uncertainties in China.

Gold Market Overview:

• Spot Gold: Increased slightly by 0.1% to $2,398.38 an ounce.
• Gold Futures: Rose 0.2% to $2,399.40 an ounce by 00:33 ET (04:33 GMT).

Gold’s Recent Performance:

Gold prices have pulled back from their recent highs earlier in July, when spot prices approached $2,470 an ounce. This decline was influenced by political uncertainties in the U.S. and a strengthening dollar driven by speculation over a potential Donald Trump presidency.

Political Factors:

Political uncertainty increased after President Joe Biden announced he would not seek reelection, endorsing Vice President Kamala Harris instead. Harris is expected to become the Democratic nominee, although formal nomination is pending. Recent polls suggest Trump has a lead over both Biden and Harris, contributing to market volatility.

Monetary Policy Expectations:

Despite political uncertainty, gold has remained relatively strong this year, buoyed by expectations that the Federal Reserve might start cutting interest rates by September. The Fed’s upcoming meeting is expected to keep rates steady, which supports gold prices.

Other Precious Metals:

• Platinum Futures: Decreased by 0.1% to $959.65 an ounce.
• Silver Futures: Dropped 0.5% to $29.188 an ounce.

Copper Market Overview:

• Benchmark Copper Futures: Rose slightly by 0.2% to $9,234.50 a tonne.
• One-Month Copper Futures: Declined by 0.3% to $4.1873 a pound.

Copper’s Recent Struggles:

Copper prices have been under significant pressure, hitting over 3-½ month lows due to concerns about China’s economic performance. Data indicating slower growth in China’s second quarter, despite an unexpected interest rate cut by the People’s Bank of China, has compounded worries.

China’s Economic Outlook:

The Chinese Communist Party’s Third Plenum did not offer substantial new economic support measures, further dampening market sentiment. Additionally, potential stricter U.S. monetary policies under a Trump administration have kept traders cautious about assets tied to China’s economy.

Conclusion

Gold prices are holding near recent lows as traders await further political and monetary policy developments in the U.S. Copper prices remain pressured by economic concerns in China and potential policy changes in the U.S. The Federal Reserve’s upcoming meeting and ongoing political developments will be key in determining future market directions for these commodities.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.87% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Disclaimer: This text constitutes marketing communication. It is not any form of investment advice or investment research or an offer for any transactions in financial instrument. Its content does not take into consideration individual circumstances of the readers, their experience or financial situation. The past performance is not a guarantee or prediction of future results.