London, April 29, 2024 – Gold prices edged lower on Monday morning, hovering near two-month lows as traders awaited cues from the upcoming Federal Reserve (Fed) meeting. The Fed is expected to announce plans regarding interest rates, which could influence the future trajectory of gold prices.
Gold had retreated from record highs reached in early April as geopolitical tensions eased and investors favored riskier assets. Rising expectations that the Fed will aggressively raise interest rates this year have pressured gold prices lower, as higher interest rates reduce the appeal of the non-yielding yellow metal as an investment.
Spot gold traded at $2,334.66 per ounce, while June gold futures held around $2,345.60 per ounce by 01:10 ET (05:10 GMT).
Investors were focused on the Fed meeting, which begins Tuesday and at which the central bank is expected to announce a 0.50% interest rate hike. If the Fed signals a more aggressive pace of rate hikes in the future, it could put further pressure on gold prices.
In addition to the Fed, macroeconomic factors, such as rising inflation and geopolitical instability, were also influencing gold prices. Growing inflation concerns have led some investors to view gold as a safe haven, while geopolitical tensions, such as the war in Ukraine, could lead to increased demand for safe-haven assets.
Among other precious metals, silver prices edged higher by 0.3% to $27.613 per ounce, while platinum gained 0.6% to $930.05 per ounce.
Copper prices rose to two-year highs on Monday morning, as hopes for strong demand from China boosted market sentiment. Beijing recently eased restrictions on home purchases in major cities in an effort to revive the property market, a key sector for copper demand.
Three-month copper futures on the London Metal Exchange rose 0.4% to $10,015.00 per tonne, while one-month copper futures gained 0.2% to $4.5962 per pound.
Expectations of tighter copper supplies due to Western sanctions on Russia have been a strong driver of prices for the metal in recent weeks.
Conclusion: Gold prices are stagnating ahead of the Fed meeting, while copper prices are lifted by China hopes. Future price movements will depend on signals from the Fed, macroeconomic factors, and developments in the precious metals market.
