Gold and Copper Maintain Recent Gains as US CPI Data Approaches

Gold prices moved little on Tuesday, but held recent gains as investors awaited more signs that US inflation is moving away from the peaks reached this year.

Spot gold rose nearly 0.1% to $1,725.70 an ounce, while gold futures fell 0.2% to $1,736.35 an ounce by 19:48 ET (23:48 GMT). Both instruments have risen in the past three sessions as the dollar retreated from a 20-year high reached last week. The greenback fell further on Tuesday, with the dollar index losing 0.1% after five consecutive days of losses. A mix of profit-taking and expectations of data showing further easing in U.S. inflation have weighed on the greenback in recent sessions. US CPI inflation data, due on Tuesday at 8:30 ET (12:30 GMT), is expected to show that inflation eased to 8.1% year-on-year in August from 8.5% in the previous month. The data, the second decline since a 40-year peak reached in June, will signal that inflationary pressures are easing in the US following a drop in fuel costs and a series of interest rate hikes by the US Federal Reserve. However, markets expect the Fed to continue raising interest rates at a high pace for the rest of the year as inflation remains well above the central bank's 2% annual target. Investors are pricing in a more than 90% chance that the Fed will raise interest rates by 75 basis points next week, the upper bound of expectations. This is expected to boost the dollar and Treasury bond yields, while keeping gold prices under pressure in the short term. Gold has fallen from highs reached earlier this year as investors sought better returns from the dollar and government debt in the face of rising interest rates. Among industrial metals, copper prices continued to rise amid a weaker dollar and expected supply disruptions due to a strike at Chile's Escondida mine. Copper futures traded in London rose 0.2% to $3.6242 a pound. It rose 1.9% on Monday. Unionized workers at Escondida, the world's largest copper mine, decided to go on strike starting this week. The move is expected to benefit prices by tightening global copper supplies. But copper also has to contend with sluggish demand in China, the biggest importer of the red metal. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!