Spot gold increased to $1,738.55/oz, and gold futures also increased to $1,750/oz.
Gold prices rose on August 29 thanks to a minor decline in the value of the dollar. On the assumption that the European Central Bank (ECB) will tighten monetary policy more vigorously than previously anticipated, the dollar dropped against the euro.
However, the likelihood of increasing US interest rates has a significant negative impact on the forecast for gold.
After the Federal Reserve indicated it has no intentions to budge from its course of monetary tightening, gold prices fell the week before. The action raised short-term Treasury yields and brought the dollar to a 20-year high.
The upcoming US Payroll figures can potentially affect the metal markets. The Federal Reserve will probably have much more ability to raise interest rates aggressively if the jobs market continues to perform well.
Markets are now factoring in a higher likelihood of a 75 bps raise by the Fed in the upcoming month as a result of the Fed’s remarks on August 26.
Limited investments have been made in gold as a safe haven, notwithstanding the slump in the stock and currency markets. However, if the economy continues to deteriorate, this might reverse.
On August 30, copper prices increased across industrial metals, benefiting from some dollar depreciation.
Futures for copper increased to $3.6108/lbs. Nonetheless, because China, the biggest consumer of copper in the world, is struggling, red metal prices are currently trading far under their 2022 highs.
Meanwhile, Wednesday’s data on Chinese manufacturing output will be scrutinized for additional hints about the demand for copper.