Investing.com-- Gold prices kept to a tight range on Tuesday, but appeared to have established a new support level amid persistent weakness in the dollar, while copper nursed sharp losses on concerns over major importer China.
The yellow metal traded close to one-month highs, tracking a slide in the dollar to 15-month lows after a series of soft U.S. inflation readings ramped up bets that the Federal Reserve was close to reaching peak interest rates for the year.
The yellow metal also appeared to have found a support level above $1,950 an ounce, keeping it well above lows hit earlier in the year, and within sight of a record high.
But gold prices stalled around these levels, awaiting fresh cues on the central bank ahead of a closely-watched Fed meeting next week. The prospect of rates staying higher for longer also limited the outlook for gold, as did signs of resilience in the U.S. economy.
Spot gold steadied at $1,955.32 an ounce, while gold futures rose 0.1% to $1,958.65 an ounce by 20:30 ET (00:30 GMT).
Dollar pinned near 15-month lows, metal markets buoyant
The greenback languished near its lowest levels since April 2022, as markets bet that the Fed had limited headroom to keep raising interest rates.
Weakness in the dollar benefits commodities priced in the greenback, while the prospect of fewer U.S. rate hikes also indicates less pressure on non-yielding assets such as gold.
But markets are still uncertain over whether the Fed will signal a pause in its rate hike cycle, given that core inflation remains sticky. Officials from the central bank offered mixed cues on the matter, with general consensus remaining for at least one more rate hike.
Other precious metals largely outperformed gold over the past week, with platinum adding 7.2%, while silver added over 8%. But the two had also fallen much more than the yellow metal earlier this year.
Copper nurses steep losses on weak China GDP
Among industrial metals, copper prices fell further on Tuesday, reeling from steep losses in the prior session as data showed that economic growth in China slowed substantially in the second quarter.
Copper futures fell 0.1% to $3.8383 a pound, after losing over 2% on Monday.
Concerns that slowing growth in China will dent global copper demand have battered prices of the red metal this year. Weakness in the country’s real estate sector- a key source of copper demand- has been a major pain point for the metal.
But the Chinese government is now expected to increase stimulus spending in order to support the economy.