HG MARKETS:

Gold prices in Asian trade saw a modest increase on Monday, driven by renewed safe haven demand following U.S. President Joe Biden’s decision to withdraw from reelection and endorse Kamala Harris as his successor. The precious metal had previously retreated from its recent peak as speculation grew about a potential second term for Donald Trump, heightening long-term inflation expectations.Spot gold edged up by 0.2% to reach $2,405 per ounce, while gold futures expiring in August experienced a slight decline of 0.3%, settling at $2,406.50. Despite these fluctuations, gold remained near last week’s record highs, when spot prices surged to $2,475 per ounce. This surge coincided with growing anticipation of interest rate cuts by the Federal Reserve.

Uncertainty surrounding U.S. political developments further bolstered demand for gold as a safe haven asset. Biden’s announcement intensified these concerns, despite Harris receiving widespread endorsement from top Democrats. The formal nomination of Harris as the Democratic presidential candidate is expected at the upcoming convention in August, following Trump’s nomination as the Republican frontrunner. Analysts commented on the potential economic implications of a Trump presidency, noting possible inflationary pressures, particularly if protectionist trade policies are implemented. The uncertainty surrounding the U.S. election outcome heightened following Biden’s decision, reflected in a significant increase in donor contributions to the Democratic Party, surpassing $50 million subsequent to the news.

Meanwhile, other precious metals showed muted performance, with platinum futures decreasing by 0.1% to $972.80 per ounce, and silver futures stabilizing around $29.28 per ounce. In the realm of industrial metals, copper prices continued to decline on Monday, extending losses observed in the previous week amid ongoing concerns about China, the largest importer of copper. Benchmark copper futures on the London Metal Exchange remained steady around $9,306 pertonne, while one-month copper futures registered a modest decline of 0.2%, reaching $4.2283 per pound. The People’s Bank of China made an unexpected move by cutting its benchmark loan prime rate, aiming to ease monetary policy and support economic growth. Overall sentiment towards China was restrained, influenced by recent economic indicators indicating weakness in the country’s economic performance.