In Asian trading on Thursday, gold prices held steady near record highs as traders continued to invest in the precious metal ahead of further insights into US inflation and interest rates.
In contrast, copper prices rebounded from recent losses, edging towards 11-month peaks following reports indicating potential output cuts by Chinese copper smelters.
The recovery in bullion prices this week has been significant, driven by expectations that the Federal Reserve could implement interest rate cuts as early as June. However, the strength of the dollar, hovering near a one-month high, has tempered gold prices slightly, keeping them just below record levels.
Spot gold steadied at $2,195.34 an ounce, while gold futures expiring in April stabilized at $2,215.80 an ounce by 01:09 ET (05:09 GMT), remaining close to the record high of $2,222.90 an ounce reached last week.
Investor attention is now focused on the Personal Consumption Expenditure (PCE) price index data, the Fed‘s preferred inflation gauge, scheduled for release on Friday. Any indications of easing inflation could fuel significant gains in metal markets, as they increase the likelihood of early interest rate cuts.
Additionally, speeches from Fed Chair Jerome Powell and FOMC member Mary Daly on Friday will be closely monitored for signals regarding interest rate cuts, especially after other Fed officials struck a somewhat hawkish tone earlier in the week. Governor Christopher Waller’s cautionary remarks about delaying rate cuts due to persistent inflation and economic resilience have contributed to market uncertainty.
The prospect of higher interest rates for a prolonged period has exerted pressure on gold prices, as it increases the opportunity cost of holding bullion. This sentiment has also affected other precious metals, with platinum futures rising marginally to $914.0 an ounce, while silver futures remained steady at $24.777 an ounce.
