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Gold Prices Rangebound Amid Rate Cut Speculation; Copper Near One-Month Low

Gold prices experienced a modest rise in Asian trading on Wednesday, though they remained confined to a narrow range that has persisted for nearly two weeks, as ongoing speculation about the Federal Reserve’s potential interest rate cuts continues to influence the market.

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Gold Prices Hold Steady

Spot gold increased by 0.4% to $2,337.35 an ounce, while gold futures for August delivery also rose by 0.4% to $2,357.05 an ounce by 00:46 ET (04:46 GMT). Despite these gains, spot gold has been trapped within a $2,300 to $2,350 per ounce range since falling from record highs in May. This period of stability reflects trader caution amid mixed signals about the Fed’s next moves.

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The dollar’s recent dip to two-month lows provided some support for gold prices, although a slight recovery in the greenback on Wednesday limited further gains.

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Rate Cut Speculation

Market participants are hesitant to make significant bets on gold, even as weak U.S. economic data fuels expectations that the Federal Reserve might begin cutting rates in September. Recent data, including lackluster job openings and a downgraded GDP reading, have heightened these speculations. The CME Fedwatch tool indicates a growing confidence among traders regarding a September rate cut.

However, caution prevails with the upcoming nonfarm payrolls data on Friday, which is expected to offer more clarity on the labor market. Additionally, the Federal Reserve is scheduled to meet next week, and is broadly anticipated to maintain current interest rates due to persistent inflation concerns.

Other precious metals showed mixed performance on Wednesday. Platinum futures dipped 0.2% to $995.50 an ounce, while silver futures climbed 0.8% to $29.863 an ounce, after both metals experienced significant losses on Tuesday.

Copper Prices Near One-Month Low

In the industrial metals sector, copper prices approached a one-month low, erasing most of the gains achieved through May amid mounting worries about slowing global economic growth.

Benchmark copper futures on the London Metal Exchange rose slightly to $9,975.50 per tonne, and one-month copper futures increased to $4.5497 per pound. Despite these modest upticks, both contracts remain near their lowest levels in a month, having relinquished the significant gains made in May when prices briefly reached record highs.

The souring sentiment toward copper is driven by middling economic indicators from the U.S. and China, which suggest a slowdown in global growth—an unfavorable scenario for copper demand.

Market Outlook

As traders await further economic data, particularly from the U.S., gold and other precious metals are expected to continue experiencing volatility. The upcoming Federal Reserve meeting and key economic reports will likely play crucial roles in shaping market sentiment and determining future price movements for both gold and industrial metals like copper.

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