Investing.com– Gold prices rose slightly during Asian trading on Monday, but remained within a tight trading range amid pressure from a stronger dollar and as traders prepared for data US inflation key this week.
The yellow metal has largely oscillated around the low $2,300 an ounce level for about two weeks as uncertainty over US interest rates kept traders averse to the yellow metal.
Shares expiring in August rose 0.2% to $2,325.52 an ounce, while those expiring in August rose 0.3% to $2,337.85 an ounce by 12:04 a.m. ET ( 04:04 GMT).
Gold, pressured by the strength of the dollar, awaiting PCE data
Gold prices were pressured primarily by the strength of the dollar, as the dollar hovered around its highest levels since early May.
The dollar’s strength came as traders discounted expectations of interest rate cuts from the Federal Reserve, especially after Friday’s strong Purchasing Managers’ Index data.
The reading raised fears that the strength of the U.S. economy will give the Federal Reserve more room to keep rates high for longer.
Attention is now largely focused on the upcoming data, which will be released on Friday. The reading is the Federal Reserve’s preferred inflation gauge and is likely to influence expectations for interest rate cuts.
The PCE data is expected to show some cooling in inflation, but is expected to remain well above the Federal Reserve’s 2% annual target.
The prospect of high long-term interest rates bodes poorly for precious metals, as it increases the opportunity cost of investing in unprofitable assets.
Other precious metals retreated on Monday after remaining largely range-bound in recent weeks. fell 0.3% to $1,005.10 an ounce, while it fell 0.2% to $29.895 an ounce.
Copper prices weaken due to the strength of the dollar and nervousness in China
The strength of the dollar also affected industrial metals prices, and copper was also pressured by fears of a trade war between China and the European Union.
The benchmark index on the London Metal Exchange fell 0.1% to $9,677.50 per ton, while one month it stabilized at $4.4205 per pound.
Sentiment towards China, the world’s largest copper importer, took a hit after the EU imposed tariffs on Chinese imports of electric vehicles. The move drew ire from Beijing, with Chinese officials raising the possibility of retaliatory tariffs and a possible trade war between the two economic giants.