Gold prices inched up in Asian trade as Federal Reserve Chair Jerome Powell’s comments stirred speculation about the timing of interest rate cuts. While gold initially saw strength due to expectations of a rate cut in September, it stalled as the Fed did not provide clear signals on future rate adjustments. Meanwhile, copper prices declined following mixed inflation signals from China, erasing gains made in recent sessions.
Powell’s testimony indicated a slight cooling in the labor market and progress in reducing inflation, but he maintained the Fed’s commitment to the 2% inflation target without giving direct cues on rate cuts. Despite expectations for a September rate cut, traders are approaching Thursday’s key inflation data with caution to assess the potential impact on the market. The dollar gained strength after Powell’s statements, adding to the uncertainty surrounding future rate decisions and their implications on gold prices.
The outlook for gold remains closely tied to interest rate movements, with high rates exerting pressure on precious metal markets in recent years. While other precious metals like silver and platinum experienced declines, silver has outperformed gold in recent months due to its industrial applications. Copper prices also dipped as China’s inflation data showed a shrinking trend, reflecting ongoing economic challenges in the country.
