Investing.com– Gold prices fell slightly in Asian trade on Monday as traders awaited more cues on U.S. interest rates from a testimony by Federal Reserve Chair Jerome Powell and key inflation data due through the week.
But bullion prices were sitting close to one-month highs, and were also on the cusp of breaking back above $2,400 an ounce amid growing conviction that the Fed will begin cutting interest rates in September. Broader metal prices also benefited from a drop in the dollar, which hit a near one-month low.
fell 0.3% to $2,384.47 an ounce, while expiring in August fell 0.2% to $2,392.55 an ounce by 00:33 ET (04:33 GMT).
Gold sits on some gains as rate cut bets increase
Gold rose sharply through the past week, breaking out of the low-$2,300s as a slew of weak readings on the labor market brewed more optimism over interest rate cuts. Soft data on Friday was a key driver of gold’s gains.
The yellow metal stands to benefit from lower rates, which are expected to free up more liquidity and also diminish the appeal of the dollar and Treasuries.
The showed traders pricing in an over 72% chance the Fed will cut rates by 25 basis points in September, up from 59% seen last week.
Focus this week is on more cues on the U.S. economy and monetary policy. is set to offer a two-day testimony before the Senate and the House, potentially shedding more light on the Fed’s plans for interest rates.
inflation data is also on tap this week and is likely to factor into the central bank’s outlook on rates.
Other precious metals also retreated on Monday, but were sitting on strong gains from last week. fell 0.6% to $1,039.25 an ounce, while fell 1% to $31.370 an ounce.
Copper mixed amid China fears
Among industrial metals, copper prices were a mixed bag on Monday as concerns over top importer China remained in play.
Benchmark on the London Metal Exchange rose 1% to $9,983.0 a tonne, while one-month fell 0.9% to $4.6235 a pound.
Concerns over China had battered copper prices in recent weeks, as recent European import tariffs on Chinese electric vehicles ramped up concerns over a trade war with the West.
Middling economic readings from China had also raised doubts over an economic rebound in the country.
Chinese and is on tap later this week.
