Author: Ambar Warrick
Investing.com– Gold prices remained in a narrow range on Monday as traders hunkered down in anticipation of this week’s Federal Reserve meeting, with the focus remaining on any signs of slowing economic growth around the world.
The Fed is expected to on Wednesday. But the central bank’s stance on future interest rate hikes will be closely watched, given that recent data have painted a somewhat mixed picture of the US economy.
While inflation has eased as expected in recent months, it still remains well above the Fed’s annual target of 2%. The US labor market and economic growth also cooled less than expected in late 2022, giving the Fed more economic room to continue raising rates.
Any negative central bank signals are likely to be negative for non-yielding assets such as gold. Markets are also awaiting readings for January later this week.
rose 0.1% to $1,929.95 an ounce, while settling at around $1,928.64 an ounce by 19:20 ET (00:20 GMT).
The focus this week is also on the fourth quarter and readings from the Eurozone, which should be released on Tuesday and Wednesday, respectively. Any signs of a pronounced slowdown in the region, particularly in economically struggling Germany, could boost demand for safe-haven gold.
The yellow metal has benefited from growing fears of a global recession this year, which as traders have also abandoned the dollar in anticipation of slower rate hikes by the Federal Reserve.
But gold’s gains stalled at a nine-month high after data showed the US economy grew more than expected in the fourth quarter, indicating the country is still resilient despite high inflation and rising interest rates.
It also boosted the , although the dollar continued to weaken near a nine-month low on Monday.
Among industrial metals, copper prices rose slightly in anticipation of the resumption of trade in Chinese markets after a one-week break.
they rose 0.1% to $4.2390 a pound, after snapping a five-week winning streak last week.
A host of Chinese economic data is also awaited this week for more indicators on the world’s largest copper importer, after it recently eased most of its COVID-19 measures. The reopening of China’s economy is expected to boost global demand for copper, which in turn could favor prices of the red metal.
Expectations of reduced copper supply also favored prices, after miners MMG Ltd (HK: ) has flagged possible production disruptions at its mines in Peru due to civil unrest in the country.