Gold Slips as Risk Appetite Grows Despite Powell’s Dovish Comments

Gold Loses Momentum After Friday’s Rally
Gold prices edged lower in Asian trading on Monday, easing back after a strong rally last week fueled by dovish signals from Federal Reserve Chair Jerome Powell. Spot gold slipped 0.2% to $3,363.88 per ounce, while December gold futures declined 0.3% to $3,408.00/oz by 01:30 ET (05:30 GMT). The yellow metal had surged nearly 1% on Friday after Powell suggested the Fed may consider rate cuts in September.

Fed Outlook: Supportive but Not Yet Certain
Powell’s remarks at Jackson Hole underscored a possible shift in monetary policy, noting that risks to the U.S. labor market were mounting. Markets interpreted this as a sign that the Fed may trim rates next month. Fed funds futures now price in an 84.1% probability of a September cut, up from about 70% the week before, according to CME FedWatch.

Still, Powell emphasized that inflation remains sticky and uncertainty over U.S. tariffs under President Donald Trump warrants caution. This tempered gold’s safe-haven appeal as investors favored higher-yielding assets in the wake of Powell’s comments.

Risk-On Rally Weighs on Precious Metals
The dollar’s weakness initially supported bullion and other commodities, but risk-on flows into equities limited demand for safe havens. Wall Street posted strong gains on Friday, and Asian equity markets followed suit on Monday, diverting investor flows away from gold.

Among other precious metals, platinum fell 0.4% to $1,359.11/oz, while silver dipped 0.1% to $38.83/oz.

Industrial Metals Outperform on Growth Hopes
Industrial metals fared better, buoyed by optimism that lower interest rates would stimulate economic activity and commodity demand.

• Copper futures gained 0.4% in London to $9,780.30 per ton, while COMEX contracts rose 0.4% to $4.5485 per pound.
• Nickel futures climbed 0.6% to $14,997.63 per ton.
• Iron ore prices spiked after Rio Tinto (ASX:RIO) suspended production at a Guinea mine following a fatal accident, tightening supply concerns.

Outlook
While gold continues to draw underlying support from expectations of Fed easing, its near-term trajectory remains capped by strong equity markets and risk appetite. Industrial metals, meanwhile, are likely to benefit more directly from optimism surrounding growth and infrastructure demand if rate cuts materialize in September.