Investing.com-- Gold prices fell slightly in Asian trade on Monday, but remained in sight of record highs last week as the prospect of lower U.S. interest rates battered the dollar and presented a brighter outlook for metal markets.
The yellow metal had surged to record highs last week, headlining gains across metal markets as traders welcomed dovish comments from the Federal Reserve. Some safe haven demand also buoyed gold as ceasefire talks between Israel and Hamas yielded few results, while hostilities in the Middle East persisted.
Spot gold fell 0.1% to $2,509.88 an ounce, while gold futures expiring in December fell 0.1% to $2,545.10 an ounce by 00:57 ET (04:57 GMT). Spot prices hit a record high of $2,532.05 an ounce last week.
Gold cheered by rate cut hopes, weak dollar
Gains in the yellow metal came as the dollar sank to a 13-month low, amid growing conviction that the Fed will begin trimming rates in September.
This notion was furthered by comments from Fed Chair Jerome Powell on Friday, who said that rate cuts were imminent and that further cooling in the labor market was unwelcome.
The prospect of lower rates bodes well for gold and other precious metals, given that it reduces the opportunity cost of investing in non-yielding assets.
Other precious metals clocked some gains last week, but retreated on Monday. Platinum futures fell 0.6% to $965.45 an ounce while silver futures fell 0.4% to $30.145 an ounce.
Some safe haven demand was also in play, as hostilities between Israel and Hezbollah increased over the weekend, while fighting between Russia and Ukraine also continued.
Copper rebound cools, but China caution persists
Among industrial metals, copper prices fell slightly on Monday as a rebound from recent lows cooled, amid persistent concerns over slowing demand in top importer China.
While the prospect of lower rates did inspire some flows into copper, the red metal was still nursing a tumble from record highs through July and August.
One-month Copper Futures fell 0.1% to $4.2557 a pound, having rebound sharply through the past week on hopes that lower interest rates will help spur increased global demand for copper.