Investing.com– Gold prices edged higher in Asian trade on Monday after suffering heavy losses last week as a slightly softer U.S. inflation print provided some respite, although caution remained following the Federal Reserve’s hawkish stance.

was 0.2% higher at $2,626.65 per ounce, while expiring in February inched 0.1% lower to $2,642.32 an ounce by 22:15 ET (03:15 GMT). 

The yellow metal had lost 1% last week after the Fed officials projected fewer interest rate cuts in 2025 in the face of sticky inflation. This hawkish tilt had bolstered the U.S. dollar and created downward pressure on gold prices.

Gold prices remain under pressure after Fed meeting, markets mull over PCE data

Gold prices had hit a one-month low on Wednesday, as the markets lowered expectations for the number of Fed rate cuts in 2025.

Markets now expect the first cut of 2025 to come in June, and are pricing in roughly two reductions in the upcoming year, according to .

Higher interest rates put downward pressure on gold as the opportunity cost of holding gold increases, making it less attractive compared to interest-bearing assets like bonds.

U.S. data released on Friday showed that  data—Fed’s favored inflation gauge —rose 0.1% in November, a slower pace from October’s 0.2% increase. This brought the annual PCE inflation rate to 2.4%, slightly below estimates of 2.5%.

However, the annual increase in , excluding volatile food and energy, remained at 2.8%, well above the central bank’s 2% target.

Other precious metals were higher on Monday. rose 0.8% to $940.15 an ounce, while gained 0.6% to $30.137 an ounce.

Dollar remains near 2-yr high

The Fed’s hawkish shift provided renewed strength to the U.S. dollar, as higher interest rates make the greenback more attractive due to increased returns on dollar-denominated assets.

The rose 0.1% in Asia hours on Monday and hovered near a two-year high it reached on Friday.

A stronger dollar often weighs on gold prices as it makes the metal more expensive for buyers using other currencies.

Copper rises on soft US inflation, markets await China stimulus

Among industrial metals, copper prices edged higher on Monday after falling more than 1% last week as softer inflation data in the U.S. boosted sentiment. 

The red metal has also been under pressure from a strong dollar after the Fed’s meeting.

Markets are awaiting details on new stimulus measures in China, as recent reports suggested Beijing will ramp up fiscal stimulus in the coming year. The country is the world’s biggest copper importer.

Benchmark on the London Metal Exchange rose 0.3% to $8,978.50 a ton, while one-month climbed 0.6 at $4.1227 a pound.

By Robert Harvey

LONDON (Reuters) -Oil prices stabilised on Monday after losses last week as lower-than-expected U.S. inflation data offset investors’ concerns about a supply surplus next year.

futures were down by 17 cents, or 0.23%, to $72.77 a barrel by 1129 GMT. U.S. West Texas Intermediate crude futures were down 14 cents, or 0.2%, to $69.32 per barrel.

Oil prices rose in early trading after data on Friday that showed cooling U.S. inflation helped alleviate investors’ concerns after the Federal Reserve interest rate cut last week, IG markets analyst Tony Sycamore said.

“I think the U.S. Senate passing legislation to end the brief shutdown over the weekend has helped,” he added.

But gains were reversed by a stronger U.S. dollar, UBS analyst Giovanni Staunovo told Reuters.

“With the U.S. dollar changing from weaker to stronger, oil prices have given up earlier gains,” he said.

The dollar was hovering around two-year highs on Monday morning, after hitting that milestone on Friday.

Brent futures fell by around 2.1% last week, while WTI futures lost 2.6%, on concerns about global economic growth and oil demand after the U.S. central bank signalled caution over further easing of monetary policy. Research from Asia’s top refiner Sinopec (OTC:) pointing to China’s oil consumption peaking in 2027 also weighed on prices.

Macquarie analysts projected a growing supply surplus for next year, which will hold Brent prices to an average of $70.50 a barrel, down from this year’s average of $79.64, they said in a December report.

Concerns about European supply eased on reports the Druzhba pipeline, which sends Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic and Germany, has restarted after halting on Thursday due to technical problems at a Russian pumping station.

U.S. President-elect Donald Trump on Friday urged the European Union to increase U.S. oil and gas imports or face tariffs on the bloc’s exports.

By Arathy Somasekhar

HOUSTON (Reuters) -Oil prices settled little changed on Friday as markets weighed Chinese demand and interest rate-cut expectations after data showed cooling U.S. inflation.

futures closed up 6 cents, or 0.08%, at $72.94 a barrel. U.S. West Texas Intermediate crude futures rose 8 cents, or 0.12%, at $69.46 per barrel.

Both benchmarks ended the week down about 2.5%.

The U.S. dollar retreated from a two-year high, but was heading for a third consecutive week of gains, after data showed cooling U.S. inflation two days after the Federal Reserve cut interest rates but trimmed its outlook for rate cuts next year.

A weaker dollar makes oil cheaper for holders of other currencies, while rate cuts could boost oil demand.

Inflation slowed in November, pushing Wall Street’s main indexes higher in volatile trading.

“The fears over the Fed abandoning support for the market with its interest rate schemes have gone out the window,” said John Kilduff, partner at Again Capital in New York.

“There were concerns around the market about the demand outlook, especially as it relates to China, and then if we were going to lose the monetary support from the Fed, it was sort of a one-two punch,” Kilduff added.

Chinese state-owned refiner Sinopec (OTC:) said in its annual energy outlook on Thursday that China’s crude imports could peak as soon as 2025 and the country’s oil consumption would peak by 2027, as demand for diesel and gasoline weakens. 

OPEC+ needed supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand outlook, said Emril Jamil, senior research specialist at LSEG. 

OPEC+, the Organization of the Petroleum Exporting Countries and allied producers, recently cut its growth forecast for 2024 global oil demand for a fifth straight month.

JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million barrels per day in 2025 and OPEC output remaining at current levels.

U.S. President-elect Donald Trump said the European Union may face tariffs if the bloc does not cut its growing deficit with the U.S. by making large oil and gas trades with the world’s largest economy.

In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported on Thursday. 

Russia has circumvented the $60 per barrel cap imposed in 2022 following the invasion of Ukraine through the use of its “shadow fleet” of ships, which the EU and Britain have targeted with further sanctions in recent days.

Money managers raised their net long futures and options positions in the week to Dec. 17, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.