Gold prices fall but eye record highs ahead of inflation test By Investing.com

Investing.com– Gold prices edged lower in Asian trade on Tuesday but remained near recent highs as traders awaited key U.S. inflation data for more clues on the Federal Reserve’s plans to begin cutting interest rates.

The yellow metal benefited from safe-haven buying following a severe risk-off move in markets last week, which was triggered by concerns about slowing economic growth.

Spot prices came within touching distance of a record high on Friday, but then retreated as they rose ahead of this week’s inflation reading.

It was down 0.1 percent at $2,502.07 an ounce, while December expiry was down 0.1 percent at $2,531.0 an ounce by 00:22 ET (0422 GMT).

Gold steady with inflation, Fed meeting on the horizon

This week the focus is squarely on inflation data due on Wednesday for more clues about the US economy.

Any sign of cooling inflation is likely to spur increased bets on lower interest rates in the coming months – a scenario that bodes well for gold.

Wednesday’s inflation reading comes just a week before , when the central bank is expected to cut interest rates by 25 basis points.

Expectations of tapering in September have also been a key driver of gold’s recent gains, with the tape likely to kick off an easing cycle by the Fed.

Lower rates bode well for gold, as they reduce the opportunity cost of investing in the yellow metal.

Other precious metals fell on Tuesday, having largely trailed gold in recent weeks. fell 0.1% to $945.0 an ounce, while it fell 0.2% to $28.590 an ounce.

Copper edges lower, Chinese trade data brings little cheer

Among industrial metals, prices retreated on Tuesday, taking little support from data that showed some economic resilience in major importer China.

China unexpectedly increased the country’s power in August. But the latecomers offset the cheer over the trend as they signaled sluggish demand in the country.

China’s total copper imports fell 12.3% year-on-year in August, although they were still in positive territory for the first eight months of the year.

The weak import data followed a string of weak readings on China’s economy over the past week, which raised concerns about slowing growth in the world’s biggest copper importer.

The data, along with a broader risk-off move in global markets, saw copper drop sharply over the past week.