Investing.com — Gold prices rose slightly in Asian trading on Wednesday, following a sharp decline in the previous session as the dollar stabilized from recent losses, with focus remaining on a possible US recession and lower interest rates.
Among industrial metals, copper prices fell after data showed Chinese copper imports weakened in June, reflecting weak demand from the world’s top copper importer.
Gold had initially benefited from safe-haven demand like an hawkish Bank of Japan, and worries about a US recession led to sharp losses in risk-driven assets, especially equities.
But markets rallied on Tuesday and Wednesday, putting pressure on safe-haven assets.
rose 0.2% to $2,393.59 per ounce, while the December expiration rose 0.1% to $2,433.70 per ounce at 00:47 ET (04:47 GMT).
Gold under pressure due to stock market recovery
Gold prices fell sharply on Tuesday after coming close to a new record earlier this week.
A recovery in global stock markets was the biggest point of pressure on gold, as a mix of bargains and some hope of a shallow US recession brought traders back to the markets.
The prospect of deeper rate cuts in the US, especially in light of recession fears, also helped keep risk appetite in play. But any rate cut will undoubtedly also support gold prices, as lower interest rates lower the opportunity cost of investing in the yellow metal.
Prices of other precious metals rose on Wednesday, reversing steep losses from the previous session. rose 1% to $928.95 per ounce, while the price rose 0.3% to $27,290 per ounce.
Copper was held back by weak import figures from China
The benchmark on the London Metal Exchange fell 0.6% to $8,876.0 per tonne, while the index fell 0.1% in one month to $4.0055 per pound.
Data on Wednesday showed China’s copper imports fell 2.9% to 438,000 tonnes in July, while demand from the world’s largest copper importer remained weak amid sluggish economic growth.
Still, China’s economy overall exceeded expectations, indicating some resilience in domestic consumption.
But the country’s economy shrank more than expected, hit by recent European trade tariffs on Chinese electric vehicles. The tariffs could now potentially impact Chinese copper demand, given the red metal’s use in the EV industry.
