Gold Prices Decline After CPI Rally, Weak Chinese GDP Weighs On Copper
On Monday, the Gold prices were rejected from their one-month highs amid a profit-taking trend among the trends. If we look at the price action, it appears that Gold has been on a bullish trend for the past 2 weeks. So a little bit of profit-taking after the CPI rally seems to be the dominant trend at play right now.
Similarly, Copper prices have also turned bearish amid weak economic data coming from China. The most recent data has shown weakness in the Chinese economy, which seems to be lingering around despite all the stimulus measures.
Dollar Remains Weak
In the last 2 weeks, the US Dollar has been on the back foot after weak inflation data, which is helping the metals such as Gold and Copper. In fact, the US Dollar has been at its 15-month lows recently, which tells us that an end to the tight monetary policy is just around the corner.
However, the US economy is showing signs of resilience which is putting a cap on the gains in Gold prices. But this was still not enough to stop the yellow metal from reaching its multi-week highs.
After touching the $1960 price level, the Gold prices seem to have come to a halt which tells us that traders are now looking for fresh impetus.
If we look at the Copper prices, it is going through a reversal right now after gaining ground in the past few weeks. Recent data from China has shown that the Q2 GDP of China has slowed, which has negatively affected Copper prices. After all, China is one of the largest importers of Copper, and a slow GDP means less demand for Copper metal.
In the past week, the Copper futures gained a 4% upside only to lose 0.7% recently, which took the metal's trading price to $3.9068/pound.
According to experts, the Q2 GDP of China only showed a little gain when compared with the Q1 GDP of China. Looking ahead, the trend will likely continue unless China introduces a massive stimulus package.