Gold prices exhibited minimal movement during Asian trading hours on Wednesday, stabilizing after recent volatility as market participants awaited cues from the Federal Reserve regarding interest rate cuts in 2024.
In contrast, copper prices experienced a significant pullback from their recent 11-month highs, driven by a combination of profit-taking and the strengthening of the US dollar, which weighed on broader metal markets.
Although gold prices remained below the record highs reached earlier in March, they showed signs of finding support around the $2,150 an ounce level. Spot gold hovered around $2,159.19 an ounce, while gold futures expiring in April registered a slight increase of 0.1% to reach $2,162.15 an ounce by 00:37 ET (04:37 GMT).
Investor attention is now firmly fixed on the conclusion of the Federal Reserve meeting scheduled for later on Wednesday. While the central bank is expected to maintain interest rates at their current levels, any indications regarding its plans for rate cuts in 2024 are poised to dictate the next movement for gold prices. Particularly significant will be the press conference with Fed Chair Jerome Powell following the meeting.
Given that inflation readings have exceeded expectations for the past two months, there is speculation that the Fed may adopt a more hawkish stance and revise its outlook for interest rate cuts this year. Such a scenario, signaling higher rates for a longer duration, could unfavorably impact gold and other precious metals. Expectations of rate cuts in 2024 had been a driving force behind gold’s recent rally, making any indications to the contrary likely to result in near-term weakness for the yellow metal and its counterparts.
In a similar vein, other precious metals witnessed consolidation this week, with platinum futures declining by 0.5% to $893.50 an ounce, while silver futures remained steady at $25.148 an ounce.
