Gold Prices Dip from 1-Month High; Awaiting Powell and CPI for Rate Cues

Gold prices experienced a slight decline during Asian trading on Monday as traders awaited more insights on U.S. interest rates from Federal Reserve Chair Jerome Powell’s upcoming testimony, along with key inflation data expected later in the week.

Despite this dip, gold remains close to one-month highs, nearing the $2,400 per ounce mark. There is increasing speculation that the Federal Reserve may begin to cut interest rates as early as September. The price movement in gold has also been supported by a decrease in the dollar, which recently reached a near one-month low.

As of the latest data, gold was down 0.3% to $2,384.47 an ounce, while August futures declined 0.2% to $2,392.55 an ounce.

### Gold Holds Gains as Rate Cut Expectations Rise

Last week, gold saw a significant rise, breaking out of the low $2,300 range due to a series of disappointing labor market reports that bolstered optimism for upcoming interest rate cuts. A key driver for gold’s recent gains was soft economic data released on Friday.

Lower interest rates are generally favorable for gold, as they increase liquidity in the market and reduce the attractiveness of the dollar and Treasury securities. Current market expectations indicate a more than 72% probability that the Federal Reserve will reduce rates by 25 basis points in September, up from 59% just a week prior.

The focus for this week remains on obtaining further insights into the U.S. economy and monetary policy. Powell is set to deliver a two-day testimony before Congress, which may provide additional context regarding the Fed’s intentions with interest rates. Additionally, inflation data is anticipated later in the week and will likely influence the central bank’s future outlook.

Other precious metals also saw declines on Monday, although they remain up significantly from last week. Platinum fell 0.6% to $1,039.25 an ounce, while palladium decreased by 1% to $31.370 an ounce.

### Mixed Performance for Copper Amid Concerns over China

In the industrial metals sector, copper prices exhibited mixed results on Monday as ongoing concerns surrounding China’s economic conditions persisted.

On the London Metal Exchange, benchmark copper rose by 1% to $9,983.0 per tonne, while one-month futures dropped 0.9% to $4.6235 per pound. Recent import tariffs on Chinese electric vehicles added to anxiety about a potential trade conflict with the West and have negatively affected copper prices in recent weeks. Furthermore, tepid economic indicators from China have cast doubt on a rebound in the country’s economy.

Upcoming economic reports from China are anticipated later this week, which could further influence market sentiment.