Gold prices fell below key levels in Asian trading on Thursday but the price is still fluctuating between ups and downs, and this week's moves reveal traders' bias towards the dollar and caution on metals ahead of key inflation data that is likely to affect interest rates.

Among industrial metals, copper prices suffered heavy losses this week amid deteriorating sentiment towards China, the largest importer of industrial metals.

Spot gold is slightly higher at $2,301 per ounce, while August gold futures are down marginally by 0.1% at $2,311 per ounce at 10:45 Riyadh time.

Strong Dollar Pressures Gold, PCE Data Awaited

Metal prices remained under pressure as the dollar rose to a near two-month high this week.

The inflows into the dollar were mainly driven by anticipation of the personal consumption expenditures price index data, due out on Friday. The reading is the Federal Reserve’s preferred inflation gauge and is widely expected to influence the central bank’s stance on interest rates.

Personal consumption expenditures data is expected to show inflation eased moderately in May, but remained above the Federal Reserve's 2% annual target.

Steady inflation gives the Federal Reserve more room to keep interest rates higher for longer — a scenario that doesn’t bode well for gold and precious metals. Dovish comments from Fed officials have also boosted expectations for higher interest rates in recent sessions.

Higher interest rates increase the opportunity cost of investing in non-yielding assets such as gold, and see traders shift more bias towards the dollar and US debt.

Other precious metals fell on Thursday, tracking the idea. Platinum futures fell 0.4% to $10.10 an ounce, while silver futures fell 0.5% to $29.117 an ounce.

Copper Weak as China Data Weakens

London Metal Exchange (LON:LSEG) copper futures rose 0.4% to $9,573.0 a tonne, while one-month copper futures fell 0.1% to $3.3665 a pound.

Both contracts have suffered sharp losses this week amid tense sentiment toward top importer China, which is embroiled in a trade dispute with the European Union over tariffs on Chinese electric vehicle imports.

Data on Thursday showed China's industrial profits stalled in May, also raising concerns about slowing economic growth in the world's biggest copper importer.