In Asian trade on Wednesday, gold prices experienced an upward surge, extending a recent rebound while the dollar retreated in anticipation of further cues on U.S. interest rates. The market’s focus shifted to the minutes of the Federal Reserve’s late-January meeting, seeking insights into the potential trajectory of U.S. interest rates.
Despite the rise, gold remained within a trading range of $2,000 to $2,050 an ounce established over the past month. The outlook for gold remained uncertain due to the possibility of higher U.S. interest rates over an extended period.
Spot gold showed a 0.3% increase, reaching $2,029.89 per ounce, while gold futures expiring in April rose 0.1% to $2,040.75 per ounce by 00:21 ET (05:21 GMT).
Investors eagerly awaited the Fed‘s minutes for more clarity on U.S. interest rates. The central bank had maintained steady rates during the late-January meeting, downplaying expectations of early interest rate cuts. However, a series of higher-than-expected U.S. inflation readings subsequently led to the diminishing likelihood of early rate cuts, impacting gold prices.
Beyond the Fed minutes, attention turned to addresses from various Fed officials throughout the week, including Raphael Bostic and Michelle Bowman, both members of the bank’s rate-setting committee. While higher U.S. rates typically have a negative impact on gold, Goldman Sachs analysts suggested that with the anticipation of rates eventually falling in 2024, gold and other metal prices might experience robust gains.
In addition to gold, other precious metals also saw an increase on Wednesday. Platinum futures rose 0.3% to $913.10 per ounce, and silver futures rose 0.2% to $23.192 per ounce. Both metals had been facing losses so far in 2024.
Copper prices, among industrial metals, reached a three-week high on Wednesday, continuing strong gains from the previous day. Copper futures expiring in March rose 0.4% to $3.8712 per pound. The increase followed various stimulus measures from China, including a larger-than-expected interest rate cut by the central bank and supportive measures for the property market, aiming to bolster economic growth. Additionally, official data indicated a significant rise in consumer spending and travel demand during the Lunar New Year holiday, fostering hopes for a recovery in Chinese consumption – a crucial driver of the economy.
