Investing.com-- Gold prices fell below key levels on Wednesday, extending a recent slump as persistent fears of rising interest rates, following hawkish signals from the Federal Reserve, saw investors largely favor the dollar. 

Rising interest rates push up the opportunity cost of investing in gold and other non-yielding assets. This trade had battered the yellow metal through the past year.

Any scope for a recovery in gold is also clouded by the prospect of U.S. rates remaining higher for longer.

Gold sees little safe haven demand even as govt shutdown looms

The yellow metal saw few safe haven flows even as markets grew more concerned over a U.S. government shutdown. Congress has until the end of September to pass a spending bill, although policymakers showed little signs of reaching consensus on a broader spending bill. 

Analysts warned that a shutdown in 2023 could have greater ramifications for the U.S. economy, especially as it grapples with high interest rates and sticky inflation. 

But that notion appeared to have driven few inflows into gold, given that past shutdowns had a limited impact on risk-driven assets, particularly stocks. 

Copper weakens despite positive Chinese data, property jitters deepen 

Optimism over the Chinese data was largely offset by worsening fears of a property market crisis. 

Evergrande is the world’s most indebted property developer, and is at the heart of a deepening debt crisis in China, which has dented economic growth over the past three years.

China’s property market is key source of copper demand, with concerns over the sector having battered copper prices through the past year.