Gold prices muted amid scant trading cues; copper reverses course

Investing.com-- Gold prices fell slightly in Asian trade on Tuesday as anticipation of key signals on U.S. inflation and the Federal Reserve dissuaded big trades, while recent strength in the dollar also weighed.

Among industrial metals, copper prices saw sharp declines since Monday as traders locked-in profits from a rush to 11-month highs last week. Weakening sentiment towards top importer China also weighed.

Gold slid from record highs last week after dovish signals from major central banks saw traders rush en masse into the dollar, pushing the dollar index to a one-month high. While the greenback did see some profit-taking this week, it still remained relatively strong.

Spot gold steadied at $2,171.90 an ounce, while gold futures expiring in April fell 0.2% to $2,172.45 an ounce by 00:25 ET (04:25 GMT). 

Gold prices muted with PCE inflation, Fed comments on tap

Gold tread water in anticipation of PCE price index data- the Fed’s preferred inflation gauge- due this Friday. The reading is widely expected to factor into the Fed’s outlook on interest rates.

Gold is expected to face some resistance in the near-term, especially if sticky inflation figures point to potential delays in the Fed’s plan to cut interest rates this year. The central bank had last week signaled that it planned to trim rates by 75 basis points in 2024, although this remained contingent on inflation. 

Comments from top Fed officials- including Chair Jerome Powell and FOMC member Mary Daly- are also due later this week. 

Any signals on higher-for-longer interest rates are likely to weigh on metal markets. 

Other precious metals lost ground on Tuesday. Platinum futures fell 0.2% to $914.60 an ounce, while silver futures fell 0.4% to $24.802 an ounce. 

Copper prices slide from 11-mth highs as China sentiment sours 

Three-month copper futures on the London Metal Exchange fell 0.3% to $8,839.00 a ton, while one-month U.S. copper futures fell 0.4% to $3.9947 a pound.

Both contracts were trading well off 11-month highs hit last week, as recent Chinese inventory data showed copper stockpiles in the world’s largest importer remained flush.

The data largely offset positive signals from top Chinese copper refiners, specifically that they intended to curb production and tighten global supplies. 

Broader sentiment towards China also worsened amid growing investor impatience over more stimulus measures from Beijing, as the country’s economy showed little signs of improvement.