Gold Prices Dip on Firm Dollar, Market Awaits Fed Rate Cut Signals

Gold prices on COMEX fell slightly in early Asian trade, pressured by a firm dollar index, which makes commodities priced in the greenback more expensive for other currency holders. The narrow trading band reflects traders' uncertainty about the timing of potential interest rate cuts by the US Federal Reserve.

Retail sales in the US rose 0.1% last month after a downwardly revised 0.2% drop in April, according to the Commerce Department's Census Bureau. Economists had forecast a 0.3% increase. The weaker-than-expected retail sales data lifted expectations for a rate cut by the Fed in September and another in December.

However, comments from Fed officials offered little clarity. New York Federal Reserve Bank President John Williams indicated that interest rates would gradually decrease over time but did not specify when the Fed might begin easing its monetary policy. Richmond Fed President Thomas Barkin stated that he would need more data before considering a rate cut.

Additionally, the bullish tone across global equity markets has tempered aggressive bullish bets on the safe-haven metal, according to FXStreet. The August gold contract on COMEX was down 0.1% at $2,343.8 per ounce.

LME Copper Prices Rise on Supply Concerns in Chile

Copper prices on the London Metal Exchange (LME) rose slightly in Asian trade, driven by supply concerns from Chile. Analysts from ANZ Research noted that a broader risk-on tone across markets likely supported copper prices. Copper production at Anglo-American's Los Bronces copper mine in Chile is expected to fall around 30% due to plant maintenance.

However, weak Chinese demand and rising global inventories are likely to cap prices. Chinese industrial output in May grew 5.6% year-on-year, slowing from 6.7% in April, according to data from the National Bureau of Statistics. China remains the top consumer of industrial metals. The three-month copper contract on LME was up 0.6% at $9,739.0 per tonne.