Gold Stabilizes as Inflation Data Takes Center Stage

Gold prices found their footing in Asian markets on Tuesday, buoyed by a slightly weaker dollar. Traders were on edge, awaiting a series of crucial inflation readings this week, particularly the U.S. Personal Consumption Expenditures (PCE) index.

The precious metal managed to recover some of its losses from the previous week, although it remained below recent record highs. This hesitation stemmed from waning safe-haven demand and growing concerns about elevated U.S. interest rates, driving investors towards the dollar and Treasuries.

However, the greenback experienced a minor dip in light trading due to the Memorial Day holiday in the U.S.

Spot gold held steady at $2,351.03 an ounce, while gold futures for June delivery also stabilized at $2,352.10. The anticipation of Friday’s PCE inflation data, the Federal Reserve’s preferred gauge, added a layer of caution for gold traders. The data is expected to shed light on the likelihood of interest rate cuts.

Recent hawkish comments from Fed officials regarding persistent inflation have tempered expectations for rate cuts this year. This has led traders to factor in a higher probability of the Fed maintaining rates in September, contrary to earlier predictions of a 25 basis point cut.

This sentiment shift pushed gold prices down from their record highs last week as traders favored the greenback.

Before the release of the PCE data, inflation readings from Australia, Japan, and Germany will also be closely monitored this week.

Other precious metals experienced modest gains on Tuesday. Platinum futures rose 0.2% to $1,066.95 an ounce, while silver futures increased by 0.3% to $31.950 an ounce.

Copper Prices Rise, Focus on China Data

In the industrial metals sector, copper prices advanced against a softer dollar. Market attention turned to upcoming data from China, the world’s largest copper importer, expected later this week.

Benchmark copper futures on the London Metal Exchange jumped nearly 2% to $10,532.50 a tonne, while one-month copper futures saw a 0.3% increase to $4.8244 a pound.

Although both contracts remained below recent record highs, they still boasted impressive gains throughout May, fueled by speculative activity and expectations of robust copper demand coupled with limited supplies.

Investors eagerly anticipated the release of China’s purchasing managers index data on Friday, seeking further insights into business activity in this major copper-consuming nation.