Gold prices struggle around $2,400; Copper battered by China woes

Investing.com– Gold prices moved little in Asian trade on Tuesday, hovering around 11-day lows as traders sought more clarity on U.S. politics and monetary policy, especially ahead of a Federal Reserve meeting next week.

Among industrial metals, copper prices fell on Tuesday, extending steep losses in recent sessions amid growing economic uncertainty over top copper importer China.

Spot gold rose 0.1% to $2,398.38 an ounce, while gold futures rose 0.2% to $2,399.40 an ounce by 00:33 ET (04:33 GMT). 

Gold tumbles from record highs; rate cuts, politics in focus 

The yellow metal was nursing a sharp drop from record highs over the past week, as uncertainty over U.S. politics weighed. 

Spot prices had surged to around $2,470 an ounce earlier in July, before pulling back sharply. Some resilience in the dollar, amid speculation over a Donald Trump presidency, also weighed on bullion prices.

Uncertainty over the U.S. presidential race rose this week after President Joe Biden withdrew his reelection bid, and instead endorsed Vice President Kamala Harris. Harris was seen gaining enough Democratic delegates to become the party’s presidential nominee, although she is yet to be formally nominated.

Still, Trump was seen polling ahead of Biden and Harris, according to CBS and HarrisX polling data from last week. But polls are yet to reflect the impact of Biden’s dropping out.

While this political uncertainty fueled some safe haven flows into gold, resilience in the dollar limited these flows. 

Still, gold was sitting on strong gains this year, amid growing optimism that the Federal Reserve will begin cutting interest rates from September. The central bank is set to meet next week and is widely expected to keep rates steady then. 

Other precious metals retreated on Tuesday. Platinum futures fell 0.1% to $959.65 an ounce, while silver futures fell 0.5% to $29.188 an ounce.

Copper nurses steep losses as China sentiment worsens 

Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.2% to $9,234.50 a tonne, while one-month copper futures fell 0.3% to $4.1873 a pound. 

Both contracts were at over 3-½ month lows as worsening sentiment towards top importer China sparked deep losses in the past week.

Data from China showed economic growth slowed in the second quarter, with an unexpected interest rate cut on Monday doing little to lift spirits. 

The Chinese Communist Party’s Third Plenum yielded scant details from Beijing on plans for more economic support.

Concerns over stricter U.S. monetary policy, stemming from a potential Trump presidency, also kept traders wary of China-exposed assets.