Gold prices rise as dollar retreats, copper rallies on China hopes
Investing.com-- Gold prices rose on Monday, taking some relief from a drop in the dollar ahead of key inflation data due this week, while copper prices rose sharply as Chinese inflation data showed some signs of improvement.
The yellow metal was nursing a steep loss from last week, as concerns over sticky inflation and higher-for-longer U.S. rates pushed the dollar to a near six-month high. The greenback saw some profit taking on Monday.
Focus is now squarely on U.S. consumer inflation data for August, due on Wednesday. The reading is expected to have increased from the prior month, giving the Federal Reserve more impetus to keep interest rates higher for longer.
Most-active December gold on New York’s Comex settled at $1,947.20 per ounce, up $4.50, or 0.2%, on the day.
The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,922.51 by 16:20 ET (20:20 GMT), up $3.16, or 0.2%.
A hotter U.S. inflation reading could set up gold prices and metal markets for more losses, especially with a Federal Reserve meeting on tap next week. Analysts expectconsumer price index inflation to have risen 0.6% in August from the prior month, accelerating from the 0.2% gain seen in July.
While the Fed is widely expected to keep rates on hold in September, any more signs of sticky inflation could push the bank into raising interest rates further this year. U.S. rates are already at their highest levels in over two decades.
Rising interest rates bode poorly for gold, given that they increase the opportunity cost of investing in the non-yielding asset. This trade had battered gold through the past year, and has limited any major recovery in the yellow metal so far in
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