Gold prices rise slightly from two-year lows on Tuesday as a rally in the dollar paused, while a recovery in copper was cut short by data showing more weakness in Chinese industrial activity. Gold futures were unchanged at $1,637.25 per ounce, while spot gold increased 0.5% to $1,629.96. Due to what looked to be a reduction in dollar pressure, both instruments rose from their lowest points since early 2020. Following a new 20-year high on Monday, the dollar index started to decline marginally.
While rising interest rates around the world have diminished the appeal of the commodity, gold prices have plunged from highs reached during the Russian invasion of Ukraine. Markets generally anticipate that gold will decline below $1,600 in the upcoming days due to recent price declines below two important support levels of $1,700 and $1,650. Over 10% has been lost from spot gold this year. Other precious metals suffered equivalent losses this year. Silver is down almost 20% and platinum lost 12.5%.
On Wednesday, Federal Reserve Chairman Jerome Powell will give a speech in which fresh hints about American monetary policy will be sought after. During last week’s Fed meeting, Powell adopted a very hawkish stance. In terms of industrial metals, copper prices on Tuesday gave up some of their early gains after data revealed that Chinese industrial profits decreased in August for a second consecutive month. Following an almost 2% decline to a two-month low in the previous session, copper futures were up 0.3% at $3.3015 per pound.
The price of the red metal, which has fallen more than 24% for the year, is currently in the range of its $3.1355 low from 2022. Copper prices have been significantly impacted this year by both a noticeable slowdown in industrial production and worries that rising interest rates may hinder global economic activity. This year, prices were significantly impacted by signs of the protracted economic downturn in China, the world’s largest consumer of copper, as investors prepared for a shortage of supply.