Investing.com -- Gold prices rose to a near three-week high on Tuesday, tracking some weakness in the dollar and Treasury yields as markets awaited a slew of key U.S. economic readings due later this week.
The greenback came off a near three-month peak this week amid some profit taking, while benchmark U.S. Treasury yields also eased off over 20-year highs.
Gold saw some safe haven bids as investors grew uncertain over how U.S. data releases will play out this week, given that they are likely to influence the path of interest rates.
This helped the yellow metal recover further from recent five-month lows, while spot prices also pushed further above the key $1,900 an ounce level.
Spot gold rose 0.3% to $1,925.51 an ounce, while gold futures expiring in December rose 0.3% to $1,953.25 an ounce by 00:05 ET (04:05 GMT).
U.S. data deluge on tap
Markets were now focused squarely on a barrage of U.S. economic readings this week, starting with consumer confidence data due later in the day.
A revised reading on second-quarter gross domestic product is due on Wednesday, while readings on personal consumption expenditures - the Federal Reserve’s preferred inflation gauge - are due on Thursday.
Nonfarm payrolls data for August is set to close out the week on Friday.
Any signs of economic resilience, particularly in inflation and the labor market, give the Fed more impetus and headroom to keep raising interest rates - a scenario that is expected to weigh on gold.
The outlook for the yellow metal also remains uncertain, given that U.S. rates are set to remain higher for longer - a trend that was recently reiterated by Fed Chair Jerome Powell.
While investors broadly expect the Fed to keep rates on hold in September, they have also scaled back any bets on an interest rate cut this year.
China stimulus hopes boost copper ahead of PMIs
Among industrial metals, copper prices rose tracking weakness in the dollar, while bets on more stimulus measures in China also helped the red metal.
Copper futures rose 0.3% to $3.8143 a pound.
Chinese state media reports said that the People’s Bank was considering cutting reserve requirements earlier than expected, a move that is expected to greatly boost liquidity in the world’s largest copper importer. Chinese officials were also seen touting more fiscal support for the economy, as it grapples with a slowing post-COVID recovery.
Concerns over China battered copper prices earlier this year, keeping them well below the $4 a pound level for most of the year.
Purchasing managers’ index (PMI) data from the country is due on Thursday and Friday, and is expected to shed more light on business activity in the country. Analysts have forecast a largely weak reading for August.