July 9 2024: Gold prices rose in Asian trade on Tuesday, recovering some of their overnight losses as traders anticipated dovish signals from Federal Reserve Chair Jerome Powell’s upcoming testimony.
The yellow metal pulled back on Monday but maintained gains from the past week due to weak labor market data, which increased expectations for a potential interest rate cut in September. A weaker dollar also supported gold’s upward movement.
Spot gold increased by 0.4% to $2,367.97 an ounce, while gold futures for August delivery rose 0.5% to $2,374.40 an ounce by 00:21 ET (04:21 GMT).
Gold Rises as Powell’s Testimony Expected to Provide Rate Cues
Gold benefited from growing speculation about a September interest rate cut, particularly as the dollar weakened. Soft labor market readings led traders to expect Powell to adopt a dovish tone during his two-day testimony before Congress starting later on Tuesday.
Although Powell recently acknowledged progress towards disinflation, he also emphasized the need for more confidence before the Federal Reserve would begin cutting rates.
In addition to Powell, more Federal Reserve officials are scheduled to speak this week. Key consumer price index inflation data, which will likely influence the Fed’s interest rate outlook, is also due.
Lower interest rates typically benefit gold and other precious metals because they reduce the appeal of the dollar and debt, which tend to perform better in a high-rate environment.
Other precious metals also rose on Tuesday. Platinum futures increased by 0.7% to $1,022.05 an ounce, while silver futures gained 1% to $31.218 an ounce. Silver has notably outperformed gold in recent months.
Copper Prices Rise as Traders Await More Cues from China
Among industrial metals, copper prices continued to rise on Tuesday, recovering from significant losses in June. Benchmark copper futures on the London Metal Exchange climbed 0.2% to $9,933.50 a tonne, while one-month copper futures increased by 0.4% to $4.6245 a pound.
Copper traders are focusing on upcoming economic data from top importer China, with trade and inflation figures expected later this week.
However, China remains a concern for copper, as declining optimism about the country’s economy led to steep losses in the red metal in June. Additionally, fears of a trade war with the West have kept copper prices relatively subdued.
