In Asian trading on Wednesday, gold prices climbed, remaining within reach of record highs fueled by increased safe haven demand following a devastating earthquake in Taiwan. Additionally, uncertainty surrounding U.S. interest rates further boosted gold’s appeal.
Amid a broad sell-off in stock markets, driven by deteriorating risk appetite, investors turned to gold as a safe haven asset. This occurred despite the dollar and U.S. Treasury yields rising following hawkish comments from top Federal Reserve officials.
The earthquake in Taiwan, which inflicted significant damage on the island’s infrastructure and top chipmaking factories, added to risk aversion. The event also triggered tsunami warnings in parts of Japan, amplifying market concerns.
Spot gold edged up 0.3% to $2,286.40 an ounce, maintaining proximity to the record high of $2,288.43 reached on Tuesday. Meanwhile, gold futures expiring in June surged 1.1% to $2,306.25 an ounce, just below lifetime highs of $2,308.85 an ounce by 00:47 ET (04:47 GMT). The retreat of the dollar from 4-½ month highs further supported the yellow metal’s gains.
Despite pressure from the Federal Reserve, which hinted at the potential delay of interest rate cuts due to persistent inflation and a robust labor market, gold prices remained resilient. With key nonfarm payrolls data for March scheduled for release on Friday, investors closely monitored economic indicators.
In addition to gold, other precious metals also benefited from increased safe haven demand and dollar weakness. Platinum futures rose 0.3% to $940.05 an ounce, while silver futures surged 2.2% to $26.480 an ounce.
In the industrial metals sector, copper prices climbed, remaining near 11-month highs, driven by positive purchasing managers index (PMI) data from China, the top importer of copper. Three-month copper futures on the London Metal Exchange increased 0.6% to $9,070.50 a ton, while one-month U.S. copper futures rose 0.5% to $4.1022 a pound.
Private PMI data indicated growth in China’s services sector improved in March, complementing positive official PMI readings on the country’s manufacturing sector. These indicators pointed to improving economic conditions in the world’s largest copper importer, further supporting copper prices.
