Due to China's Problems, Gold Resists $1,780 As Copper Falls

Gold prices fell Thursday as safe-haven demand decreased owing to diminishing fears of a Russia-Ukraine conflict escalation. Copper prices fell further due to concerns over a COVID outbreak in China.

After four consecutive sessions of gains, bullion profited but still reached a three-month high.

Spot gold fell 0.3% to $1,773.88 per ounce, while gold futures stayed at $1,777.0 per ounce as of 17:00 ET (00:00 GMT). NATO countries said a missile that killed two people in Poland was likely fired by Ukrainian forces in reaction to a Russian missile strike, lowering demand for gold as a safe haven.

Gold prices rose as the dollar fell in anticipation of a less hawkish Federal Reserve and softer-than-expected U.S. inflation data suggested diminishing price pressures.

Fed members favor fewer rate hikes to avoid a recession. The markets expect the Fed to hike rates by 50 basis points in December.

This year, rising interest rates dragged down gold prices by increasing the opportunity cost of holding the yellow metal. Experts say lowering U.S. inflation may help gold's chances.

"Pullbacks have been small, and upward pressure remains. A breach of $1,780 might drive another leap and relieve concerns about the rally's endurance," Oanda analysts said.

As investors awaited U.S. economic data, the dollar maintained steady Thursday.

Concerns over China's weakening economic development kept copper prices steady on Thursday.

Copper prices remained flat at $3.7575 a pound on worries that a new COVID-19 outbreak in China might impact economic activity.

As China faces its biggest COVID-19 pandemic in six months, weaker-than-expected economic statistics reinforce this notion.

This has offset tighter copper supplies owing to outages in Chile and Peru.