Gold prices are muted amid rate uncertainty; copper slides as China euphoria fades Via Investing.com
Investing.com– Gold prices were flat in Asian trading on Tuesday, firming after falling from record highs as traders cheered hopes of a modest interest rate cut by the Federal Reserve.
Among industrial metals, copper prices fell sharply as Chinese markets reopened from a week-long holiday, while Beijing's plans to implement recently announced stimulus measures were disrupted.
This week the focus has been on additional issues from the Fed, as well as key inflation data that will likely affect the rate outlook.
Gold prices had risen to record highs in September after the Fed cut rates by 50 basis points and launched an easing cycle. But doubts about the future pace of the central bank's rate cuts caused the yellow metal to retreat.
The strength of the dollar – which hit a seven-week high in recent sessions – also weighed on steel markets.
settled at $2,642.86 an ounce, while in December expiration it fell 0.2% to $2,661.70 an ounce.
The golden nurses fell to the highest levels; More estimates are awaited
The yellow metal has come down from record highs in the previous week, now the focus is on more indicators in interest rates.
The bulk of gold's losses came after stronger-than-expected data on Friday when traders largely scaled back expectations of an upcoming rate cut.
Traders were pricing in an 81% chance of a 25 bps cut in November, and a 19% chance of a 19% cut.
This week the focus was on the minutes of the Fed's September meeting to gain more insight into its view on future rate cuts, as the bank predicts a more data-driven approach.
data due later this week is set to provide more clues on inflation, while also focusing on the Fed's outlook.
While low interest rates bode well for steel markets, the slow pace of tapering makes non-yielding assets look less attractive in the near term.
Other precious metal prices also fell on Tuesday. It was down 0.8% to $977.50 an ounce, and down 1.1% to $31.660 an ounce.
Copper slides as China stimulus cheer wears off
Among industrial metals, copper prices fell sharply on Tuesday as Chinese markets opened after a week-long holiday.
Benchmark on the London Metal Exchange fell 1.5% to $9,800.50 a tonne, while one-month was down 1.9% to $4.4697 a pound.
Copper initially benefited from optimism about China, after Beijing announced a series of major stimulus measures in late September. China is the largest importer of copper in the world.
But the tightening waned on Tuesday, especially as the Chinese government provided concrete plans for how it intends to implement stimulus measures.
