Gold prices experienced a slight uptick in Asian trading on Wednesday, recovering from sharp losses in the previous session as the US dollar steadied. The market’s focus remains on the potential for a U.S. recession and the prospect of lower interest rates.
Gold Market Movements
Spot gold increased by 0.2% to $2,393.59 per ounce, while gold futures for December delivery rose 0.1% to $2,433.70 per ounce by 00:47 ET (04:47 GMT). The slight rise in gold prices follows a sharp decline on Tuesday when the yellow metal approached a record high earlier in the week.
The initial boost in gold came from safe-haven demand, driven by a hawkish stance from the Bank of Japan and fears of a U.S. recession, which led to significant losses in risk-driven assets, especially stocks. However, a rebound in global stock markets on Tuesday and Wednesday pressured safe-haven assets like gold. The renewed risk appetite was spurred by bargain buying and hopes for a shallow U.S. recession.
Impact of Interest Rates
The prospect of significant U.S. interest rate cuts, particularly amidst recession fears, also played a role in sustaining risk appetite. While lower rates tend to boost gold prices by reducing the opportunity cost of holding non-yielding assets, the rebound in stock markets temporarily overshadowed this effect.
Other Precious Metals
Other precious metals also recouped losses from the previous session. Platinum futures surged 1% to $928.95 per ounce, and silver futures rose 0.3% to $27.290 per ounce, reflecting a recovery in the broader precious metals market.
