In Asian trade on Wednesday, gold prices remained within a narrow range as an overnight rebound was largely hindered by the strength of the dollar ahead of crucial signals on inflation and interest rates.
Over the past two weeks, the yellow metal retreated from record highs as dovish signals from other major central banks favored the dollar. The dollar index edged up slightly in Asian trade and approached a one-month high.
Spot gold stabilized at $2,179.98 an ounce, while gold futures expiring in April saw a marginal increase to $2,178.60 an ounce by 00:25 ET (04:25 GMT).
Despite some gains in overnight trading, gold prices faced resistance from the persistent strength of the dollar. Traders continued to favor the dollar following dovish signals from the Swiss National Bank and the Bank of England, positioning it as the primary high-yielding, low-risk currency.
Anticipation surrounding key PCE price index data, the Fed‘s preferred inflation gauge, and forthcoming comments from top Fed officials fueled further flows into the dollar. Investors awaited additional cues on potential U.S. interest rate cuts.
However, market expectations suggest that the Fed may only commence rate reductions from June onwards, limiting the upside for gold in the near term. Nonetheless, the yellow metal is anticipated to benefit from lower interest rates towards the end of the year.
In the realm of precious metals, platinum futures edged up 0.1% to $918.50 an ounce, while silver futures dipped 0.2% to $24.573 an ounce.
Meanwhile, copper prices continued to slide from 11-month highs as sentiment toward top importer China remained subdued. Three-month copper futures on the London Metal Exchange decreased by 0.4% to $8,836.00 a ton, while one-month U.S. copper futures fell 0.3% to $3.9932 a pound.
Despite a reported 10.2% increase in Chinese industrial profits during the first two months of 2024, much of this growth stemmed from a lower base for comparison from the prior year. Additionally, concerns over Chinese demand escalated as inventory data indicated robust Chinese copper stockpiles thus far in 2024, offsetting expectations of a copper supply shock following plans by major Chinese refiners to scale back production.
