Gold prices decline after Trump attack
Gold prices saw a slight decline in early Asian trading on Monday, remaining close to a record high but experiencing minimal increases in safe haven demand following an alleged assassination attempt on former U.S. President Donald Trump.
Increased U.S. political uncertainty drove safe haven buying, favoring the dollar, which managed to recover some recent losses on Monday. Despite this, the dollar stayed weak amid rising expectations of U.S. interest rate cuts, which have bolstered gold in recent weeks.
Spot gold decreased by 0.2% to $2,407.49 per ounce, while gold futures set to expire in August dropped by 0.4% to $2,412.20 per ounce by 20:34 ET (00:34 GMT).
U.S. political uncertainty grows after Trump attack
Markets continued to grapple with an uncertain political outlook for the U.S. after a failed assassination attempt on Trump during a campaign rally in Butler, Pennsylvania, on Saturday.
The assailant shot at Trump, hitting him in the ear, though the former president was still seen urging supporters to “fight!”
Initially, heightened political tensions were expected to boost safe haven investments in gold. However, this did not materialize as expected, with the dollar receiving some inflows and the yellow metal retreating after the attack.
Analysts speculated that the attack might improve Trump’s chances against Democratic frontrunner Joe Biden in the upcoming election. A potential Trump presidency could lead to higher inflation and debt, typically resulting in a stronger dollar.
The greenback rose about 0.2% against a basket of currencies, though it was still recovering from steep losses over the past two weeks.
Traders were cautious towards gold as it traded close to its record high of $4,050 per ounce reached earlier this year. Historically, gold has seen sharp declines following brief record highs.
Gold and broader metal markets benefited from increased speculation over Federal Reserve interest rate cuts. A soft consumer price index inflation reading last week led traders to bet on a 25 basis point rate cut by the Fed in September, which negatively impacted the dollar.
Other precious metals also retreated on Monday, with little immediate safe haven demand.
Platinum futures fell 0.6% to $1,007.65 per ounce, while silver futures decreased by 0.9% to $30.890 per ounce.
Copper edges lower as China concerns grow ahead of GDP data
Among industrial metals, copper prices fell on Monday, extending losses from last week amid ongoing concerns over top importer China.
Data from Friday showed China’s imports of the red metal fell in June, raising questions about domestic demand.
Benchmark copper futures on the London Metal Exchange fell by 0.4% to $9,841.50 per tonne, while one-month copper futures decreased by 0.4% to $4.5633 per pound.
Attention is now focused on key Chinese gross domestic product data for the second quarter, due later on Monday. The reading is expected to show a slowdown in growth, which could negatively impact copper demand.
Is it the right time to invest in gold?
Investing in gold can be a wise decision for those looking to diversify their portfolios, safeguard against inflation, and secure their assets during economic instability. Gold’s lasting value and status as a safe haven asset make it an attractive investment, especially in turbulent or uncertain markets.
Will gold rate increase in 2024?
Gold prices are expected to increase, underscoring its status as a safe-haven asset amid worldwide economic issues. Experts predict that gold could hit Rs. 70,000 per 10 grams in 2024, influenced by geopolitical tensions, rising inflation, and concerns about economic slowdown.
Is it good to invest in gold funds now?
Gold funds are considered among the safest investment choices since they are overseen by the Securities and Exchange Board of India (SEBI). SEBI regularly reviews and reports on the status of these funds, assisting investors in evaluating and forecasting their returns.
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