Gold Prices Soften, Experience Limited Relief from Increased Rate Cut Bets

Gold prices saw a decline in Asian trading on Monday, receiving minimal support from rising expectations of interest rate cuts in the U.S. Traders are anticipating further guidance from the Federal Reserve and the state of the U.S. economy later this week.

The price of gold remained within the established trading range seen throughout most of June, showing little progress even as the U.S. dollar weakened. The price dropped slightly to $2,325.74 an ounce, while August futures fell 0.2% to $2,336.05 an ounce.

Despite a positive shift in sentiment towards a potential September rate cut following last week’s economic data, interest in gold remained tepid. The market experienced a decline of over 0.2% on Monday, extending losses from the previous session. Traders are now pricing in a nearly 58% chance of a 25 basis point cut in September.

Although lower interest rates generally favor precious metals, gold prices made little movement as traders awaited key information from the Federal Reserve and upcoming economic reports. Fed Chair Jerome Powell is scheduled to speak on Tuesday, with important data releases expected on Wednesday and Friday, including employment figures for June.

Other precious metals also faced a downturn on Monday, with prices for silver dropping 0.5% to $1,004.60 an ounce, and platinum decreasing by the same margin to $29.405 an ounce.

In the realm of industrial metals, copper prices fell on Monday, reflecting a negative sentiment fueled by mixed economic indicators from China, the leading importer of copper. The benchmark price on the London Metal Exchange decreased by 0.6% to $9,545.50 per tonne, while one-month copper futures fell 0.5% to $4.3550 per pound.

Recent government data from China showed a continued contraction in the manufacturing sector for the second month in a row, aggravating concerns about the country’s economic outlook. However, a separate report indicated that the sector experienced its fastest growth in three years. The conflicting data has left traders uncertain about the trajectory of the economic recovery in China, leading to significant losses in copper prices throughout June.