Gold edged lower in early Asian trade Monday, reversing part of last week’s surge sparked by comments from Federal Reserve Chair Jerome Powell. Spot gold slipped 0.2% to $3,363.88 an ounce, while futures eased 0.3% to $3,408.00/oz by 01:30 ET.
The pullback followed a sharp 1% rally on Friday, when Powell suggested that the Fed may be preparing for interest rate cuts in September. His remarks boosted bets on monetary easing, sending the U.S. dollar lower and briefly lifting demand for metals.
Yet, investors quickly pivoted toward higher-yielding, risk-driven assets, limiting gold’s upside. U.S. equities rallied strongly Friday, and Asian markets followed suit on Monday, diverting flows away from safe-haven holdings.
Inflation, Jobs Data Shape Fed Path
Powell’s message carried both optimism and caution. While noting cooling signs in the labor market, he emphasized that no final decision had been made. Persistent inflation and uncertainty surrounding President Donald Trump’s trade tariffs remain key risks.
Market sentiment, however, tilted firmly toward easing. Fed funds futures now price in an 84.1% chance of a September rate cut, according to CME FedWatch data—up from 70% just a week ago. That shift weakened the greenback, offering a temporary lift to commodities denominated in dollars.
Still, metals failed to sustain momentum as risk-on sentiment overshadowed haven demand.
Key market moves:
- Spot gold: down 0.2% at $3,363.88/oz
- Gold futures: down 0.3% at $3,408.00/oz
- Spot silver: down 0.1% at $38.83/oz
- Spot platinum: down 0.4% at $1,359.11/oz
Industrial Metals Gain on Growth Bets
While precious metals cooled, industrial commodities benefited from expectations that lower borrowing costs will stimulate global demand.
- Copper futures rose 0.4% to $9,780.30 a ton on the London Metal Exchange, while COMEX copper added 0.4% to $4.5485 a pound.
- Nickel futures advanced 0.6% to $14,997.63 a ton.
- Iron ore prices surged after mining giant Rio Tinto (ASX: RIO) suspended operations at a Guinea site following a fatal accident, tightening supply outlooks.
For now, Powell’s signal has split commodity markets: gold and silver face pressure from investors chasing equity gains, while copper, nickel, and iron ore ride hopes of renewed growth.