Gold Prices Steady Amid Rate Uncertainty; Copper Falls as China’s Optimism Wanes

Gold prices experienced little movement in Asian trading on Tuesday, following a decline from record highs as traders adjusted their expectations regarding potential interest rate cuts by the Federal Reserve.

In the realm of industrial metals, copper prices notably dropped as Chinese markets reopened after a week-long holiday. Market reactions were tepid in light of Beijing’s recently announced stimulus measures, which failed to excite traders.

This week’s focus is on further indications from the Federal Reserve, alongside crucial inflation data that will likely influence the outlook on interest rates. Gold prices had surged to record levels in September after the Fed reduced rates by 50 basis points and initiated an easing cycle. However, uncertainty regarding the central bank’s future rate-cutting trajectory led to a retreat in gold prices. Furthermore, strength in the dollar, reaching seven-week highs in previous sessions, also impacted metal markets.

Currently, spot gold is stable at $2,642.86 an ounce, while December gold futures have decreased by 0.2% to $2,661.70 an ounce.

### Gold Retreats from Record Highs; Awaiting Rate Insights

Over the past week, gold has retreated from its record highs, with traders now seeking more clarity on interest rate movements. A significant portion of gold’s recent losses was attributed to stronger-than-expected nonfarm payroll data released on Friday, which caused traders to temper their expectations for future rate cuts. Current market assessments indicate an approximately 81% probability of a 25 basis point cut in November and a 19% chance of a larger cut.

This week, traders are particularly focused on the minutes from the Fed’s September meeting to gain more insight into the bank’s outlook concerning potential rate adjustments. Additionally, consumer price index data set to be released later this week is expected to offer further insights on inflation while influencing the Fed’s perspective.

Though lower interest rates are generally favorable for metal markets, a slower approach to rate cuts might diminish the appeal of non-yielding assets in the near term.

Other precious metals also saw price declines on Tuesday. Platinum futures decreased by 0.8% to $977.50 an ounce, while silver futures fell by 1.1% to $31.660 an ounce.

### Copper Prices Decline as China’s Stimulus Enthusiasm Fades

In the industrial metals sector, copper prices fell sharply on Tuesday as mainland Chinese markets reopened after their holiday break. Benchmark copper futures on the London Metal Exchange declined by 1.5% to $9,800.50 a ton, and one-month copper futures dropped by 1.9% to $4.4697 a pound.

Copper had initially gained from optimism surrounding China, following the announcement of significant stimulus measures by the government in late September. As the world’s largest copper importer, any sentiment regarding China’s economic support is closely monitored. However, the enthusiasm faded by Tuesday as the government’s implementation plans for the stimulus measures were deemed underwhelming.