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Gold prices retreat on CPI angst, copper hit by China uncertainty By
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IntroductionBy Ambar Warrick -- Gold prices fell to near one-month lows on Monday as traders awaited more cues o ...
By Ambar Warrick
-- Gold prices fell to near one-month lows on Jinrong China official website loginMonday as traders awaited more cues on the U.S. economy from key inflation data due this week, while copper prices nursed steep losses amid growing uncertainty over an economic recovery in China.
A new year rally in gold prices cooled over the past two weeks as markets reassessed their outlook for U.S. monetary policy. The Federal Reserve recently signaled that it plans to keep raising interest rates even as inflation softened in recent months.
Tuesday’s (CPI) inflation reading is expected to shed more light on where interest rates could potentially peak in the country. While inflation is expected to have fallen further in January from the prior month, it is still trending at relatively high levels.
fell 0.2% $1,862.42 an ounce, while fell 0.1% to $1,872.85 an ounce by 19:10 ET (00:10 GMT).
Rising interest rates bode poorly for gold and other non-yielding assets. Strength in the , which benefits from higher rates, also makes the yellow metal more expensive to purchase, weighing on demand.
Bullion prices were also pressured by rising short-term Treasury yields, as an reached its deepest level since the 1980s. The trend signals a potential recession in the world’s largest economy this year.
This scenario may benefit gold prices later in 2023, especially if the Fed pauses its rate hikes due to mounting economic pressure. Gold saw some safe haven plays in the beginning of the year as the dollar retreated and as several economists warned of a looming recession.
Other precious metals also sank on Monday. fell 0.3% to $948.40 an ounce, while tumbled 0.8% to $21.095 an ounce.
Among industrial metals, copper prices retreated slightly on Monday after logging three straight weeks of sharp declines on uncertainty over a Chinese economic recovery.
fell 0.1% to $4.0107 a pound.
Copper prices plummeted on Friday after data showed Chinese grew less than expected in January, while inflation weakened further despite the relaxing of anti-COVID restrictions.
The weak data showed that an economic recovery in the world’s largest copper importer may take longer than expected, especially as it grapples with increasing COVID-19 cases.
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