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Gold prices edged slightly higher in Asian trading on Tuesday but remained subdued, retaining losses from earlier in the week as anticipation of U.S. Federal Reserve signals and robust dollar strength kept the metal under pressure.
- Spot gold rose 0.1% to $2,640.77 per ounce.
- Gold futures for February delivery increased 0.2% to $2,663.66 per ounce by 23:16 ET (04:16 GMT).
Dollar Strength and Market Uncertainty
The U.S. dollar rallied sharply on Monday following President-elect Donald Trump’s tariff threats against the BRICS nations and political unrest in France, which weakened the euro and supported the greenback. A stronger dollar typically pressures gold, making it more expensive for non-dollar buyers.
Fed Policy and Economic Data in Focus
Gold traders are closely watching upcoming remarks from Federal Reserve officials, especially Chair Jerome Powell’s speech on Wednesday, as it could provide insights into the Fed’s policy direction ahead of its final 2024 meeting.
The Fed is widely expected to implement a 25 basis point rate cut in December. However, persistent inflation and labor market resilience add uncertainty to the long-term rate outlook.
Investors are also eyeing nonfarm payrolls data for November, set to release on Friday, which is anticipated to reflect a recovery from prior disruptions caused by hurricanes. A strong labor market report could dampen gold prices by bolstering expectations for tighter monetary policy.
Higher interest rates generally weigh on gold as they increase the opportunity cost of holding non-yielding assets like precious metals.
Mixed Trends in Precious and Industrial Metals
- Platinum futures slipped 0.3% to $948.15 per ounce.
- Silver futures rose 0.6% to $31.058 per ounce.
Copper Retreats Amid U.S.-China Trade Tensions
Copper prices dipped as concerns over U.S.-China trade relations and economic headwinds in China persisted.
- Benchmark copper futures on the London Metal Exchange fell 0.1% to $8,994.0 per ton.
- February copper futures dropped 0.3% to $4.1282 per pound.
Despite some support from improved business activity in China, fueled by recent stimulus measures, traders remain cautious ahead of key political meetings in December that could shape China’s economic outlook.
The U.S.’s tighter restrictions on chipmaking technology exports to China further complicate trade relations, potentially curbing China’s industrial growth and appetite for copper.
While geopolitical and economic uncertainties are supporting gold, the strength of the U.S. dollar and rising interest rate expectations pose significant headwinds. For industrial metals, any sustained recovery will depend on clarity over U.S.-China trade relations and further signs of stabilization in China’s economy.
