Gold Prices Steady as Dollar Weakens Amid Inflation Concerns

Gold Prices Stabilize Amid Upcoming Inflation Data

Gold prices remained steady in Asian trading on Tuesday, finding some support from a slight dip in the dollar as traders prepared for a series of important inflation reports this week, particularly from the United States.

The yellow metal has recovered some losses from the previous week but is still significantly lower than its recent record highs. Diminished safe haven demand and rising concerns over high U.S. interest rates have led traders to shift their focus.

The dollar dropped slightly in low-volume trading, influenced by the Memorial Day holiday observed on Monday.

Gold maintained its position at $2,351.03 an ounce, while June futures held steady at $2,352.10 an ounce. Last week, spot gold reached a peak of approximately $2,450 an ounce.

Market Caution Ahead of Inflation Reports

Traders are exercising caution regarding gold as they await crucial data scheduled for release this Friday. This report serves as the Federal Reserve’s preferred measure of inflation and will play a significant role in shaping the outlook for potential interest rate cuts.

This anticipation follows warnings from several Federal Reserve officials that persistent inflation could postpone any rate cuts in the current year. These comments have prompted traders to adjust their expectations, increasing the likelihood that the Fed will maintain current rates in September rather than implementing a 25 basis point reduction.

Such expectations contributed to the decline in gold prices from last week’s record highs, as market sentiment shifted more favorably toward the dollar.

In addition to the Friday inflation data, readings from other regions are also expected this week.

Meanwhile, other precious metals saw slight increases on Tuesday, with silver rising 0.2% to $1,066.95 an ounce, and platinum climbing 0.3% to $31.950 an ounce.

Copper Prices Rise as Chinese Data Anticipated

Copper prices advanced in response to a weaker dollar, with market attention focused on forthcoming data from China, the largest importer of copper, expected later this week.

Benchmark copper on the London Metal Exchange surged nearly 2% to $10,532.50 a tonne, while one-month futures rose 0.3% to $4.8244 a pound.

Both copper contracts remain significantly below recent peaks but have enjoyed considerable gains throughout May, driven by speculative interest related to projected strong demand and supply constraints.

This week, all eyes will be on key economic data from China set to release on Friday, which will provide additional insights into business activity in the world’s leading copper importer.