China's problems slow copper's comeback while gold prices rise

Gold prices recovered from two-year lows on Tuesday as the dollar's rally stalled, while Chinese industrial activity news halted copper's comeback.

Spot gold rose 0.5% to $1,629.96 per ounce, while futures were unchanged at $1,635.25 per ounce (01:57 GMT). Both instruments rebounded from their lows since early 2020 as dollar pressure eased.

The dollar index fell after reaching a 20-year high Monday. This year, a slump in major asset classes and rising interest rates boosted the dollar's safe-haven demand, allowing it to surpass gold.

Since Russia invaded Ukraine, rising interest rates have reduced gold's appeal.

After falling below $1,700 and $1,650, the market anticipates gold to drop below $1,600 in the next few days. Gold's near-term upside seems limited. Gold is down 10% this year.

This year, other precious metals fell. Platinum and silver both fell 12.5%.

Jerome Powell will speak on U.S. monetary policy on Wednesday. Last week's Fed meeting was marked by Powell's hawkishness.

Copper prices retreated Tuesday as Chinese industrial profits fell for a second month in August.

Copper futures recovered 0.3% to $3.3015 a pound after plunging 2% to a two-month low. The red metal is down 24% this year and nearing its 2022 low of $3.1355.

Rising interest rates and a drop in industrial production have hurt copper prices this year.

Investors planned anticipating a supply constraint due to China's economic slowdown, the world's top copper importer.