Gold prices showed minimal movement on Tuesday amid a lack of clear catalysts, while the dollar and Treasury yields maintained their stability ahead of a series of Federal Reserve speakers scheduled to provide insights later this week.
Despite a robust performance in recent weeks, gold has encountered challenges in making substantial gains recently. This is especially evident as the dollar and yields have remained resilient, despite signs of a cooling U.S. economic environment.
The prevailing expectation that the Federal Reserve will maintain higher interest rates for an extended period has limited investor interest in gold. Recent labor and inflation data have indicated that the central bank needs to keep its policy restrictive in the short term.
As of 01:03 ET (05:03 GMT), spot gold remained virtually unchanged at $1,938.78 per ounce, while December gold futures steadied at $1,964.50 per ounce.
Attention Shifts to Fed Speakers Ahead of September Meeting
Investor focus has now shifted to a lineup of Federal Reserve speakers scheduled for this week. These speakers are anticipated to provide further insights into monetary policy ahead of an interest rate decision later this month.
Dallas Fed President Lorie Logan is slated to speak on Wednesday, followed by Chicago Fed President Austan Goolsbee on Thursday. Additionally, Fed Open Market Committee members John Williams and Michelle Bowman are also scheduled to address the public on Thursday.
Despite some weaker economic data, which has fueled hopes that the Fed’s room for further interest rate hikes is limited, the central bank is still expected to maintain higher rates for an extended period. This expectation is reinforced by recent indicators pointing to persistent inflation and a stable labor market.
Gold Prices Face Challenges Amid Higher Rates
Higher interest rates typically have a negative impact on gold prices, as they increase the opportunity cost of holding the precious metal.
While concerns over a possible economic slowdown in China and the eurozone continue to offer some support, the prospect of a soft landing for the U.S. economy this year has diminished gold’s appeal as a safe haven asset.
Copper Prices Remain Stable Amid Mixed China Signals
In the realm of industrial metals, copper prices exhibited little change on Tuesday, partly influenced by a stable U.S. dollar.
A private survey indicated that China’s service sector growth in August fell short of expectations, offsetting optimism stemming from a previous reading that demonstrated resilience in the manufacturing sector.
Copper futures held steady at $3.8327 per pound.
The main concern weighing on copper prices this year has been the prospect of slowing growth in China, the world’s largest copper importer. This slowdown is occurring as China grapples with the challenges of a post-COVID recovery. Market attention this week is focused on key trade data from China, which will offer insights into the country’s appetite for copper imports.
Investors are also closely monitoring Beijing’s approach to releasing additional stimulus measures, as patience among market participants wanes.
