Gold steadies above $1,900, copper rises on some strength in China

investing.com:

Investing.com-- Gold prices moved little in early trade on Monday as markets awaited more cues on the U.S. economy this week, while copper prices rose on data signaling some strength in the Chinese manufacturing sector.

The yellow metal found some support as a drop in the personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge- weighed on the dollar and triggered a rally across most asset classes.

But core PCE inflation still remained high, a trend that is expected to keep the Fed raising interest rates in the near-term. The high core reading, coupled with some signs of resilience in the U.S. economy, saw markets pricing in a nearly 87% chance the Fed will hike rates later in July.

Rising interest rates are expected to limit any potential gains in gold, as is improving risk appetite.

Spot gold fell 0.1% to $1,917.24 an ounce, while gold futures fell 0.2% to $1,925.15 an ounce by 22:07 ET (02:07 GMT). 

Bullion prices rose 5% in the first half of 2023, having benefited from some safe haven demand as global economic conditions deteriorated.

While the yellow metal also rose to record highs in May, it has since relinquished a bulk of those gains on the prospect of rising U.S. interest rates. Rising rates push up the opportunity cost of holding non-yielding assets such as gold.

Signs of resilience in the U.S. economy have also dented the safe haven appeal of the yellow metal, as an upward revision in first quarter gross domestic product saw markets trim their expectations for a U.S. recession this year. 

A slew of U.S. economic data, including nonfarm payrolls and business activity readings, is on tap this week, and is expected to provide more cues to gold. The minutes of the Fed’s June