Investing.com — Gold prices rose in Asian trading on Wednesday, although gains were limited by dollar strength as uncertainty over the U.S. presidential race and expectations of a Federal Reserve meeting kept traders on edge.
However, industrial metals suffered deep declines, with copper prices at a near four-month low, amid deteriorating sentiment towards key commodity importer China. Copper’s latest decline was driven by weak growth data from China.
rose 0.3% to $2,416.72 per ounce, while the August term rose 0.4% to $2,417.65 per ounce. Spot prices fell from the record highs of the past two weeks.
Gold stable as dollar recovers
Gains in the yellow metal were capped by a recovery in the dollar, which benefited from a mix of safe-haven demand and positioning ahead of a Fed meeting next week.
Traders remained largely biased against the dollar amid continued uncertainty over the 2024 presidential election, especially after President Joe Biden withdrew from the race and endorsed Vice President Kamala Harris as the Democratic nominee.
Harris was seen quickly gaining support from the party, which would set her up for a showdown with Republican candidate Donald Trump this year.
A Reuters/Ipsos poll showed Harris slightly ahead of Trump after her endorsement by Biden.
Traders were also cautious about metals markets ahead of a Fed meeting next week, where the central bank is widely expected to keep interest rates steady. But the focus will be on when the bank plans to cut rates, with the general consensus pointing to a cut in September.
Other precious metals retreated, with platinum and silver losing ground due to their exposure to industrial metals.
Copper continues to decline due to the problems in China
The benchmark on the London Metal Exchange fell 0.4% to $9,132.50 a tonne, while one-month copper futures fell 0.6% to $4.1427 a pound. Both contracts were at a low point of almost four months.
Copper and broader industrial metals have been battered by ongoing concerns about demand from top commodity importer China after the country posted slower-than-expected growth in the second quarter.
The Chinese Communist Party’s third plenum provided few indications of plans for more stimulus from Beijing, while an unexpected interest rate cut earlier this week was largely disappointing.
Sentiment towards China was also affected by uncertainty about the US elections, particularly about what a change of administration meant for Washington’s attitude towards China.
