Gold prices in Asian trading remained relatively unchanged, staying below recent record highs as investors favored the dollar while awaiting further signals from the Federal Reserve regarding inflation and interest rates.
Investors showed limited interest in the yellow metal as safe-haven demand waned slightly amid expectations of a potential ceasefire between Israel and Hamas, particularly with the United States intensifying efforts to broker a deal. The Biden Administration’s reported suspension of arms exports to Israel in response to attacks on Rafah added to diplomatic efforts.
However, the primary downward pressure on gold prices stemmed from concerns about the potential for sustained higher interest rates in the United States. Several Federal Reserve officials have indicated that persistent inflationary pressures could delay any plans for rate cuts in the near future.
Spot gold prices edged up by 0.2% to reach $2,313.51 per ounce, while gold futures expiring in June dipped slightly by 0.1% to $2,320.60 per ounce as of 00:21 ET (04:21 GMT).
The prospect of extended high interest rates is a significant deterrent for gold investors, as it increases the opportunity cost of holding the precious metal.
Investor sentiment regarding future Federal Reserve actions remained cautious, with attention shifting to forthcoming addresses by Fed officials scheduled for Thursday and Friday. Despite lingering hopes for a rate cut in September, market focus has turned toward key upcoming data releases, notably the consumer price index (CPI) figures for April, which are expected to provide clearer signals about the trajectory of interest rates.
In other precious metal markets, platinum futures gained 0.7% and silver futures rose by 0.5% on Thursday, although both remained well below recent peak levels.
Turning to industrial metals, copper prices experienced a modest increase on Thursday but remained subdued compared to recent two-year highs, reflecting concerns over weakened Chinese import data and its implications for demand.
Three-month copper futures on the London Metal Exchange rose by 0.3% to $9,940.00 per ton, while one-month copper futures increased by 0.4% to $4.5592 per pound.
Recent government data from China showed that while overall imports surged beyond expectations in April, copper imports softened due to recent price hikes that dampened demand. This trend raised doubts about robust demand in the world’s largest copper importer.
Despite these developments, expectations of tightening market conditions have supported copper prices, which have seen a substantial increase over the past two months.
