© Reuters.
Investing.com – Gold has not yet recovered in Tuesday’s trading from Monday’s decline, and markets fell ahead of several important data coming from the US economy, in addition to a series of speeches from Federal Reserve officials.
While the yellow metal witnessed strong gains after the start of the war between Hamas and Israel, which pushed investors to safe havens, it reversed course this week after the US inflation reading, which was stronger than expected, led to increased concerns about rising interest rates, according to a number of experts. .
The lack of an immediate escalation in the war also weakened safe haven demand in the near term, while it found its footing near 11-month highs.
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Spot gold contracts (Spot) are trading at $1920.66 per ounce with sideways movement, while (Futures) records $1933.45 per ounce with sideways movement as well. Both instruments fell by approximately 0.3% yesterday, Monday.
US economic data and Fed comments are ready to be announced
The focus is now on US data due later on Tuesday, with any signs of resilience, especially in retail spending, indicating elevated expectations for inflation.
Data last week showed a higher-than-expected reading in the US for September, raising concerns that the Federal Reserve will remain hawkish for longer, in order to bring down steady inflation.
A number of Fed officials are also scheduled to speak this week, most notably on Thursday. Powell’s comments will be closely watched in the wake of the strong inflation readings, given that the Fed chair had signaled longer interest rate hikes at the Fed’s previous meeting.
High interest rates do not bode well for gold, since it increases the opportunity cost of investing in the yellow metal. This trade has weighed on gold over the past year, and is expected to limit any significant gains until the Federal Reserve begins cutting interest rates.
Copper decline and Chinese GDP in focus
Among industrial metals, copper prices reversed recent gains on Tuesday, as markets fell ahead of key Chinese economic readings this week.
It fell by 0.5% to 3.5648 per pound.
Also, data in China for the third quarter, due on Wednesday, is expected to show a further deterioration in growth in the world’s largest copper importer.
Data for September – also due on Wednesday – is expected to show continued weakness in the sector, which accounts for the bulk of Chinese copper demand.
However, copper bulls received some encouragement from quarterly production numbers from major miner Rio Tinto () Ltd ASX: The miner recorded slightly stronger shipments of iron ore and copper with steady demand in China.
2023-10-17 08:19:16
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