Investing.com – Gold prices rose in Asian markets today. It is approaching new record levels amid growing bets that the Federal Reserve will start cutting interest rates from September.
But gold's rise was limited by a stronger dollar, with growing confidence that Donald Trump will win a second term as president.
U.S. Treasury notes rose 0.2% to $2,427.77 an ounce, while notes due in August rose 0.1% to $2,432.30 an ounce as of 00:46 ET (04:46 GMT).
Gold prices near new record high on rate cut bets
The spot price is now just $30 below its high of around $2,450 reached in May.
Gold's recent gains have been supported by rising bets that the Federal Reserve will start cutting interest rates by September, following weak inflation figures and dovish signals from central banks.
Federal Reserve Chairman Jerome Powell said Monday that the central bank is more confident that inflation is coming down. Although he did not directly mention a rate cut, markets interpreted his words as a signal that a rate cut was imminent.
Investors believe there is no need for the central bank to keep interest rates on hold in September. There is now a roughly 90% chance of a 25 basis point rate cut, according to the tool.
Other precious metals rose on these sentiments but remained volatile today, down 0.3% while up 0.2%.
Strong dollar limits gold's rise
But the cash-back is slowing gold gains, especially after the dollar recovered from a one-month low this week.
The dollar has been supported by growing speculation that Trump will win a second term as president. The recent assassination incident appears to have boosted his popularity significantly, which now puts him ahead of Joe Biden in the presidential election.
Trump is expected to pursue more protectionist trade policies. This could lead to higher inflation and support for the dollar.
Copper steady amid China concerns
Among industrial metals, copper prices remain stable as the outlook for copper is clouded by growing concerns about China.
On the London Metal Exchange, futures fell 0.1% to $9,795.50 a tonne, while they rose 0.2% to $4,521 a pound.
Weaker-than-expected data from China also cast doubt on the domestic economic recovery. This could be bad news for copper demand in China.
In addition, Trump's candidacy for the presidency may cause more trade problems for China. This will lead to further deterioration of China's economy.
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