Investing.com — Gold prices fell below key levels in Asian trading on Thursday as traders continued to favor the dollar and remain wary of metals against key inflation data that is likely to play a role in interest rates.
In industrial metals, copper prices posted losses this week amid deteriorating sentiment toward top importer China.
fell slightly to $2,298.86 per ounce, while the August term fell 0.2% to $2,309.35 per ounce at 23:55 ET (03:55 GMT).
Strong dollar puts pressure on gold, PCE data awaits
Metal prices remained under pressure as the dollar rose to its highest in almost two months this week.
The inflow into the dollar was mainly driven by anticipation of the figures, which will be announced on Friday. This metric is the Fed’s favorite inflation gauge and is widely expected to play a role in the central bank’s stance on interest rates.
The PCE data is expected to show that inflation cooled slightly in May but remained above the Fed’s annual target of 2%.
Persistent inflation gives the Fed more leeway to keep interest rates high for longer – a scenario that does not bode well for gold and precious metals. Hawkish comments from Fed officials also boosted expectations of high interest rates during recent sessions.
Higher interest rates increase the opportunity cost of investing in non-yielding assets like gold, and cause traders to focus more on the dollar and U.S. debt.
Other precious metals fell on Thursday, following the lead. fell 0.4% to $1,025.10 per ounce, while the price fell 0.5% to $29.117 per ounce.
Copper weak now that Chinese figures are disappointing
The benchmark on the London Metal Exchange rose 0.4% to $9,573.0 per tonne, while falling 0.1% in the month to $3.3665 per pound.
Both contracts saw steep losses this week amid worsening sentiment toward top importer China, which is embroiled in a trade dispute with the European Union over tariffs on imports of Chinese electric vehicles.
Data on Thursday showed growth in China stalled in May, also raising concerns about slowing economic growth in the world’s top copper importer.
