By Ambar Warrick
Investing.com-- Gold prices slipped further on Monday as uncertainty over the Federal Reserve’s path of monetary tightening persisted, while copper prices fell on more manufacturing troubles in major importer China.
Spot gold prices fell 0.1% to $1,745.46 an ounce, while Gold futures dropped 0.2% to $1,759.90 an ounce by 20:33 ET (00:33 GMT).
Prices had retreated last week as hawkish comments from several Fed officials suggested that the central bank was likely to commit to raising interest rates at a sharp clip to combat overheated inflation.
Given that the comments came in the wake of data showing some softening in U.S. inflation, traders grew uncertain over how the Fed would tighten policy at its next meeting.
Data shows that traders are almost evenly split between a 50 and 75 basis point hike by the Fed during its September meeting. Soft inflation readings had initially skewed this trend largely towards a 50 basis point hike.
The dollar index rose marginally on Monday, holding last week’s gains as focus turned to Fed Chair Jerome Powell’s address to the Jackson Hole Symposium this Friday.
The prospect of rising U.S. interest rates has seen the dollar largely overtake gold as a safe haven this year, despite the yellow metal gaining substantially in the initial onset of the Russia-Ukraine conflict in February.
In industrial metals, copper prices extended their decline as concerns grew over slowing demand in major importer China. A severe energy crunch in the Sichuan province- which saw the suspension of some factories- also provided negative lead-ins for copper.
Copper futures fell 0.5% to $3.6520 a pound. Prices of the red metal have been severely impacted by slowing industrial activity in China, as Beijing’s strict zero-COVID policy shut down factories in major industrial hubs.
Weak industrial data from China saw copper prices fall through last week, with the trend expected to continue. But the red metal did take some relief on stimulus measures by Beijing, which aim to shore up infrastructure spending in the country.
The People's Bank of China is expected to cut lending rates further on Monday, in order to shore up economic growth.
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