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Investing.com — Gold prices fell slightly in Asian trading on Monday, but are still eyeing two-month highs as growing confidence that the U.S. will cut interest rates this year spurs a surge in the yellow metal. .
However, gold could struggle again in the short term, especially ahead of important Federal Reserve signals and labor data later this week.
By 00:12 ET (05:12 GMT), it was down 0.1% at $2,080.86 an ounce, and April expiry was down 0.3% at $2,089.25 an ounce. Both stocks have each risen more than 2% over the past week, hitting new 2024 highs and also breaking trading ranges set for most of the year so far.
Gold's rally was driven by some weak US economic data fueling speculation that the US Federal Reserve will cut interest rates by June. But hopes for further cues from central banks have once again led traders to back away from big bets on the yellow metal.
Other precious metals also fell on Monday. fell 0.4% to $888.70 an ounce and fell 0.5% to $23.240 an ounce.
Powell testimony and non-farm employment statistics are awaited.
The market is now focused squarely on this week's two days of testimony for further clues on the direction of interest rates.
Analysts say Powell is widely expected to maintain his hawkish leanings and that the Fed needs more convincing that inflation is moving back towards the Fed's 2% annual target. I expect that he will announce it again.
However, traders are still pricing in an increased likelihood of a 25 basis point (bp) rate cut in June, the paper said.
Powell's testimony has also focused on key statistics for February to be released on Friday. A cooling labor market is also one of the Fed's main considerations in changing interest rates.
Copper prices gradually fall ahead of further stimulus from China, ANZ eyes India
Among industrial metals, metals expiring in May fell 0.4% to $3.8443 per pound as the market turned cautious towards red metals ahead of important signals from China, its largest importer. .
China is scheduled to hold the 2024 National People's Congress on Tuesday, where it is likely to roll out further stimulus measures and also release economic forecasts for 2024.
Copper prices have fluctuated over the past two years on concerns about slowing Chinese demand as the country's post-coronavirus economic recovery failed to materialize.
But ANZ analysts said India's rapid growth could offset slowing demand in China. Recent data shows that India will remain the world's fastest growing economy in 2023, and the country's sustained infrastructure spending is likely to boost copper demand.
