Investing.com – Gold prices rose slightly today after falling sharply in the previous session. Expectations of the U.S. Federal Reserve meeting and additional signals on interest rates prompted traders to shift more towards the dollar.
Among industrial metals, copper prices continue to fall amid concerns about slowing demand from China. Production expectations from the joint agreement between BHP and Lundin Mining (OTC:) The acquisition of Filo Corp and the expansion of copper projects in South America also put pressure on the copper market.
Gold, pressured by a stronger dollar ahead of the Federal Reserve's interest rate decision on Wednesday, rose 0.1% to $2,387.98 an ounce, while December futures rose 0.2% to $2,431.35 an ounce.
Gold steady ahead of Fed rate signal.
Gold prices stabilized after sharp fluctuations in the previous session. It hit a record high at the beginning of the month due to demand for safe assets.
But gold prices have fallen from record highs after the market shifted its focus to US interest rates. While lower interest rates are good for gold, any signs to the contrary will increase risks for the sector.
This caution has prompted traders to turn to the dollar. The Federal Reserve begins its two-day meeting today.
The central bank is expected to conclude its meeting on Wednesday, but any signs of plans to start cutting interest rates will be closely watched.
The market is expecting a 25 basis point rate cut in September, but further rate cuts remain uncertain.
Other precious metals recovered from sharp losses in the previous session, rising 0.3% to $962.55 an ounce, while gold rose 0.7% to $28.055 an ounce.
Copper hits 4-month low on China concerns, output outlook
On the London Metal Exchange, contracts fell 0.5% to $8,980.0 a tonne, while they fell 0.9% to $4.0585 a pound. Both contracts are still trading at their lowest levels in nearly four months.
Copper has been facing heavy losses in the past month. With concerns about slowing Chinese demand continuing to weigh on market sentiment, Wednesday’s PMI data is expected to provide further clues on China.
The trend of increasing supply is also putting pressure on copper prices.
BHP Group Ltd (ASX:), the world's largest producer, and Canada's Lundin Mining Corporation (TSX:) have announced a $4 billion joint venture to acquire the copper mining company. Philo Mining Company (TSX:) in South America, with the aim of expanding projects in the region and increasing copper production.
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