Investing.com– Gold prices edged lower on Tuesday, extending losses into a fourth straight session as markets hunkered down before a Federal Reserve meeting this week, while copper saw some strength as focus remained on Chinese stimulus measures.
Strength in the and also pressured metal prices, as investors pivoted into the greenback in anticipation of the Fed meeting.
The recent losses saw gold pull back towards the $1,950 an ounce level, which is expected to be tested as a support as markets fret over the upcoming Fed decision.
fell slightly to $1,954.34 an ounce, while expiring in August fell 0.3% to $1,955.75 an ounce by 20:08 ET (00:08 GMT).
Fed rate hike priced in, but outlook uncertain
The Fed is widely expected to at the conclusion of a two-day meeting on Wednesday, although markets are expected to have already priced in the hike.
A key point of uncertainty for traders is what the central bank will signal with regards to its plans for future rate hikes. show that the central bank is expected to announce an extended pause in its rate hike cycle after Wednesday’s hike.
But given that U.S. inflation is still trending well above the Fed’s annual target, the bank could still potentially signal at least one more rate hike this year.
Rising interest rates bode poorly for non-yielding assets such as gold, given that they push up the opportunity cost of holding bullion. This trade battered gold through 2022, and has limited gains in the yellow metal so far this year.
The outlook for gold also remains uncertain, given that U.S. rates are likely to stay higher for longer.
Copper rises, China stimulus in focus
Among industrial metals, copper prices rose slightly on Tuesday, extending gains from the prior session after major importer China signaled more policy support for its struggling economy.
State media reports said that China’s top leaders had pledged more support during a meeting of the Politburo, a top decision-making body of the Communist Party.
While the move heralds more spending in the world’s largest copper importer, it also comes as China’s property market teeters on the edge of a debt crisis. Manufacturing activity in the country has also slowed sharply this year.
Concerns over China battered copper prices this year, with the red metal now struggling to recover. rose 0.1% to $3.8528 a pound, after a 0.6% gain in the prior session.
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