In today’s trading session, gold prices in Asian markets dipped below critical thresholds, reflecting ongoing investor preference for the dollar and cautious sentiment surrounding precious metals ahead of pivotal inflation data likely to influence interest rate decisions.
Spot gold edged down to $2,298.86 per ounce, with August gold futures slipping 0.2% to $2,309.35 per ounce by 23:55 ET (03:55 GMT).
The recent strengthening of the dollar has exerted downward pressure on metal prices, with the dollar index reaching a near two-month high this week. This surge in the dollar has been fueled by expectations surrounding the upcoming release of the Personal Consumption Expenditures (PCE) price index data scheduled for Friday. The PCE index is closely monitored by the Federal Reserve as a gauge of inflation trends and is anticipated to impact the central bank’s monetary policy stance. While projections suggest a slight moderation in May’s inflation figures, the levels are expected to remain above the Fed’s 2% annual target.
Persistent inflation concerns have bolstered expectations that the Federal Reserve may maintain higher interest rates for an extended period, unfavorable conditions for gold and other non-yielding assets. Recent remarks from Fed officials have further solidified market expectations of a sustained hawkish stance.
As a result, platinum futures declined by 0.4% to $1,025.10 per ounce, while silver futures followed suit with a 0.5% drop to $29.117 per ounce on Thursday.
Meanwhile, in the realm of industrial metals, copper prices have faced downward pressure throughout the week amidst deteriorating sentiment towards China, the world’s largest importer of copper. Benchmark copper futures on the London Metal Exchange managed a slight uptick of 0.4% to $9,573.0 per tonne, but one-month copper futures slipped 0.1% to $3.3665 per pound.
The waning market sentiment towards copper is exacerbated by recent economic data from China revealing stagnant industrial profit growth in May. This development has raised concerns over the pace of economic expansion in China, particularly amid ongoing trade tensions with the European Union, specifically regarding tariffs on Chinese electric vehicle imports.
The combined effect of these factors underscores the fragile state of global metal markets, where geopolitical uncertainties and economic data continue to wield significant influence over investor decisions.
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