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Gold prices saw a decline in Asian trade on Monday, as investors awaited key inflation data from the U.S. and sought clarity from the White House on upcoming tariff rulings affecting bullion bars.
Gold Prices Dip Amid Market Uncertainty:
- Spot Gold: Spot gold fell 0.7%, reaching $3,376.24 an ounce.
- Gold Futures: December gold futures dropped 1.5%, settling at $3,438.22 per ounce.
This decline followed a surge last week when gold futures reached a record high of $3,530 per ounce. The surge was sparked by the U.S. Customs and Border Protection ruling that standard 1-kilogram and 100-ounce gold bars would be subject to an import tariff. This decision led to a disruption in gold flows, with Swiss refiners halting shipments to the U.S. due to the tariff, which has raised concerns about the impact on global gold trade, particularly from Switzerland, a key refining hub.
The U.S. administration has signaled that it will issue an executive order to clarify the tariff policy, offering some relief and easing tension in the gold futures market.
U.S. Inflation Data and Federal Reserve Outlook:
Investors are also awaiting the July Consumer Price Index (CPI) report, set to be released on Tuesday. The CPI is expected to show a modest 0.2% increase from June, providing key insights into inflation trends. The Producer Price Index (PPI) will follow later in the week. These data points are crucial for assessing the Federal Reserve’s policy direction, with market expectations heavily favoring a rate cut in September. Weak U.S. labor data released earlier this month has only strengthened these rate cut expectations.
Global Trade Tensions and Tariff Uncertainty:
The U.S.-China tariff truce, which has prevented further escalation of duties, is set to expire on August 12. While there is optimism regarding a potential extension of the truce, the outcome remains uncertain, adding to the global market unease and contributing to the softer gold prices.
Other Precious Metals and Copper Market:
- Platinum: Platinum futures fell 0.6% to $1,331.95 per ounce.
- Silver: Silver futures dropped 0.7% to $38.275 per ounce.
- Copper: Benchmark copper futures on the London Metal Exchange rose 0.3% to $9,789.25 a ton, while U.S. copper futures remained unchanged at $4.47 per pound.
With markets focused on upcoming economic data, especially U.S. inflation readings and tariff clarifications, precious metals and broader commodities will likely remain volatile in the short term.
