Gold prices edged lower in Asian trading on Monday, giving back some of last week’s strong gains that were driven by dovish signals from Federal Reserve Chair Jerome Powell. His comments fueled market expectations for interest rate cuts, but the rally in the yellow metal quickly lost steam.
Investors shifted their focus toward riskier assets, limiting demand for safe havens like gold. While the dollar’s weakness offered some support to metals, the momentum from Friday’s surge proved short-lived.
Spot gold slipped 0.2% to $3,363.88 per ounce, while gold futures dropped 0.3% to $3,408.00 by 01:30 ET (05:30 GMT). This followed a 1% rally on Friday after Powell suggested the Fed could move toward cutting rates as early as September.
Powell acknowledged that the U.S. labor market is showing signs of cooling, but he also cautioned that inflation remains elevated and uncertainty surrounding President Donald Trump’s trade tariffs continues to weigh on policy decisions.
According to CME FedWatch data, traders now see an 84.1% chance of a September rate cut, up from 70% just a week earlier. The outlook pushed the dollar lower, boosting commodities priced in the greenback, but much of the support faded as investors chased higher returns in equities and other risk assets.
Other precious metals also saw mild declines. Spot platinum fell 0.4% to $1,359.11 per ounce, while spot silver edged down 0.1% to $38.83 per ounce.
Industrial metals, by contrast, outperformed. Copper gained on hopes that lower interest rates will stimulate economic growth and demand for raw materials. Benchmark copper futures on the London Metal Exchange rose 0.4% to $9,780.30 a ton, while COMEX copper futures added 0.4% to $4.5485 a pound. Nickel futures climbed 0.6% to $14,997.63 a ton.
Iron ore prices also jumped after top miner Rio Tinto Ltd (ASX:RIO) suspended production at a Guinean site following a fatal accident, adding supply concerns to the market.
