© Reuters.

Investing.com — Gold prices fell slightly on Monday as anticipation of a key Federal Reserve meeting kept investors wary at the beginning of the week, while copper prices nursed steep losses on concerns over slowing demand in China.

A recovery in the , ahead of the Fed meeting, also somewhat pressured metal markets, with the greenback pulling further away from 15-month lows hit earlier in July.

Still, bullion prices remained within sight of a two-month peak, amid increasing bets that the Fed will potentially signal a pause in future rate hikes, after one last hike this week.

fell slightly to $1,961.66 an ounce, while fell 0.2% to $1,963.35 an ounce by 20:44 ET (00:44 GMT). 

Fed in focus, 25 bps hike widely expected 

Markets were widely focused on a Fed decision over interest rates, at the conclusion of a two-day meeting on Wednesday. The central bank is widely expected to .

But investors are also betting that the central bank will announce an extended pause in future rate hikes, given that the Fed is coming close to the end of its nearly 16-month-long rate hike cycle.

Such a scenario bodes well for gold, given that rising interest rates push up the opportunity cost of investing in bullion. But whether the yellow metal will be able to retake record highs is uncertain, given that U.S. rates are also set to remain higher for longer.

Uncertainty over whether the Fed will pause its rate hike cycle also remained in play, given that is still trending above the central bank’s 2% annual target. 

Other precious metals retreated on Monday, with down 0.1%, while fell 0.2%.

Beyond the Fed, the and the are also set to decide on monetary policy this week.

Copper steadies from steep weekly drop, China stimulus in focus 

Among industrial metals, copper prices steadied after tumbling nearly 3% in the past week, as markets remained focused on major importer China.

rose 0.1% to $3.8223 a pound.

Weak economic readings from China had triggered steep losses in copper prices over the past week, as a recovery in the world’s largest copper importer ran out of steam.

The Chinese government is now expected to roll out more stimulus measures to support growth – a scenario that could spark increased copper imports by the country. 

But measures aimed at increasing automobile and consumer electronics spending, which Beijing unveiled last week, provided limited support to the red metal.