Gold prices fall as interest rate tensions rise ahead of Fed meeting – Gold prices fell in Asian trade on Tuesday, remaining well below recent highs, as concerns about longer-term higher U.S. interest rates grew ahead of this week's Federal Reserve meeting.

Reduced safe-haven demand has also contributed to pressure, especially with recent reports suggesting renewed ceasefire talks between Israel and Hamas. This makes gold more susceptible to interest rate-driven risks.

It fell 0.4% to $2,326.45 an ounce, while gold with June expiry fell 0.9% to $2,337.30 an ounce at 00:44 ET (04:44 GMT). Spot prices are more than $100 below the all-time high set in early April.

But despite recent losses, gold prices rose more than 4% in April, continuing strong gains in March.

Fed jitters weigh on gold prices as hopes of rate cut fade

Focus is now on later this week, when the central bank is widely expected to keep interest rates steady. But Fed Chairman Jerome Powell is expected to offer a more hawkish outlook on interest rates, especially after a slew of hot inflation data.

Signs of sticky inflation have led traders to largely rule out any near-term interest rate cuts from the Federal Reserve. The central bank is currently expected to cut interest rates only in September or the fourth quarter (if there is one this year).

Higher interest rates in the long term are bad for gold because they increase the opportunity cost of investing in gold. The stronger outlook for interest rate stabilization is also weighing on broader metals markets.

Other precious metals also retreated on Tuesday. It fell 0.1% to $959.05 an ounce, while falling 1.8% to $27.168 an ounce.

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Copper prices stalled as China PMI remains at middling levels, but strong in April

Among industrial metals, copper prices hovered near a two-year high on Tuesday as upbeat purchasing managers' index data from top importer China dampened recent gains.
Prices on the London Metal Exchange were steady near $10,185.0 a ton, down 0.1% to $4.6738 a pound.

China's official PMI data showed that the growth rate in April slowed down slightly from March. But growth has been much slower than expected.

While painting a better picture for manufacturing, Tuesday's data still reflected continued weakness in China's economy despite a strong first quarter.

That raises some questions about strong copper demand in the world's largest importer of the red metal.

Still, copper prices rallied throughout March and April as the prospect of tighter supplies spurred increased buying of the red metal amid more sanctions on Russia and production cuts at Chinese refineries.

April copper futures rose 14% to 16%.

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