Gold Prices Dip Slightly in Asian Trade as Investors Await Fed Chair Powell's Testimony
Gold prices experienced a slight decline in Asian trade on Monday as investors eagerly awaited more information on U.S. interest rates from Federal Reserve Chair Jerome Powell's testimony and key inflation data scheduled for release throughout the week.
Despite the slight dip, bullion prices were still near one-month highs and were close to breaking above $2,400 an ounce. This increase in prices is fueled by growing belief that the Fed will begin cutting interest rates in September. Additionally, the broader metal prices benefited from a decrease in the dollar, which hit a near one-month low.
Gold fell 0.3% to $2,384.47 an ounce, while gold futures expiring in August fell 0.2% to $2,392.55 an ounce.
The recent rise in gold prices has been driven by weak readings on the labor market, leading to optimism over potential interest rate cuts by the Fed. The market is currently pricing in a 72% chance of a 25 basis points rate cut in September, up from 59% the previous week.
This week, investors are focusing on further developments regarding the U.S. economy and monetary policy. Powell is scheduled to provide a two-day testimony before the Senate and the House, which could provide more clarity on the Fed's plans for interest rates. Additionally, inflation data is set to be released this week, which will likely impact the central bank's outlook on rates.
In other metal news, copper prices were mixed on Monday due to ongoing concerns over China, the top importer of the metal. While benchmark copper prices rose, one-month copper prices fell as worries over a trade war with the West and doubts about China's economic rebound lingered.
Overall, the market is anticipating significant movements in gold and copper prices based on upcoming economic data releases and Powell's testimony. Investors should stay informed and be prepared for potential market volatility in the coming days.