Gold retreats as Fed week kicks off, copper reels from China woes
Investing.com-- Gold prices fell slightly on Monday as anticipation of a key Federal Reserve meeting kept investors wary at the beginning of the week, while copper prices nursed steep losses on concerns over slowing demand in China.
A recovery in the dollar, ahead of the Fed meeting, also somewhat pressured metal markets, with the greenback pulling further away from 15-month lows hit earlier in July.
Still, bullion prices remained within sight of a two-month peak, amid increasing bets that the Fed will potentially signal a pause in future rate hikes, after one last hike this week.
Spot gold fell slightly to $1,961.66 an ounce, while gold futures fell 0.2% to $1,963.35 an ounce by 20:44 ET (00:44 GMT).
Markets were widely focused on a Fed decision over interest rates, at the conclusion of a two-day meeting on Wednesday. The central bank is widely expected to raise interest rates by 25 basis points.
But investors are also betting that the central bank will announce an extended pause in future rate hikes, given that the Fed is coming close to the end of its nearly 16 month-long rate hike cycle.
Such a scenario bodes well for gold, given that rising interest rates push up the opportunity cost of investing in bullion. But whether the yellow metal will be able to retake record highs is uncertain, given that U.S. rates are also set to remain higher for longer.
Uncertainty over whether the Fed will pause its rate hike cycle also remained in play, given that U.S. inflation is still trending above the central bank’s 2% annual target.
Other precious metals retreated on Monday, with platinum futures down 0.1%, while silver futures fell 0.2%.
Beyond the Fed, the European Central Bank and the Bank of Japan are also set to decide on
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