In Monday’s Asian trading session, gold prices showed a slight increase, rising 0.4% to $4,017.13 an ounce, while U.S. gold futures saw a slightly sharper rise of 0.8%, reaching $4,027.55. Despite this upward tick, gold remains under pressure following two consecutive weeks of losses, with prices notably dropping more than 2% last week alone. On a brighter note, the precious metal managed to garner nearly 4% in gains for October.
The underlying weakness in gold prices can be attributed to ongoing uncertainty regarding future U.S. interest rate cuts. Last week, the Federal Reserve made a move to cut rates by 25 basis points, a decision that typically benefits non-yielding assets such as gold. However, comments from Fed Chair Jerome Powell indicated that additional rate cuts are “not a foregone conclusion.” This cautious stance has led investors to reconsider expectations for another rate decrease in December, contributing to a stronger dollar and further pressure on bullion prices.
The dollar index hovered near three-month highs on Monday, making gold more expensive for overseas purchasers, which could dampen demand. Additionally, easing geopolitical tensions have also played a role in reducing gold’s appeal as a safe-haven asset. Last week’s high-profile meeting between U.S. President Donald Trump and Chinese President Xi Jinping concluded with pledges from both leaders to lower trade barriers. The discussions reportedly included potential U.S. tariff reductions and increased Chinese imports of American goods, signaling a thaw in relations between the two economic powerhouses. This detente has alleviated some market anxieties stemming from their previous escalated tensions.
In contrast to gold, other precious metals experienced more pronounced gains during the session. Silver futures rose by 1.1% to $48.705 an ounce, while platinum futures surged by 1.8%, reaching $1,603.60 an ounce. Industrial metals, however, exhibited a lackluster performance amid disappointing data from China’s manufacturing sector. Benchmark copper futures on the London Metal Exchange remained subdued at $10,903.20 a ton, and U.S. Copper Futures dipped slightly by 0.1%, settling at $5.11 a pound.
A private survey released on Monday pointed to slower growth in China’s manufacturing sector for October, which fell short of expectations. The sector continues to grapple with cooling price levels and a worsening economic outlook, adding to concerns that could further impact demand for industrial metals.
