Gold prices held steady during Asian trade on Wednesday, with market participants closely watching for upcoming U.S. inflation and interest rate signals. A somewhat hawkish stance on interest rates kept traders cautious about the metal markets.
In the industrial metals sector, copper prices remained rangebound as initial optimism over Chinese stimulus measures faded. Traders are now awaiting further economic signals from China, the world’s largest copper importer.
Spot gold slipped by 0.1% to $2,358.93 per ounce, while gold futures edged up 0.1% to $2,359.80 per ounce ahead of their expiration this week. This stability in gold prices came despite a strengthening dollar and firmer Treasury yields in overnight trade.
Gold Steadies with Focus on Interest Rate Cues
Gold prices have maintained their levels, roughly $100 below the record highs reached last week. The market’s focus remains on potential U.S. interest rate cuts, especially following several hawkish signals from the Federal Reserve that have diminished expectations for a September rate cut.
Minneapolis Fed President Neel Kashkari warned on Tuesday that some policymakers have not ruled out further rate hikes to address persistent inflation. This scenario poses challenges for metal markets.
Kashkari’s comments precede a series of speeches from other Fed officials this week, along with the release of the Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred inflation measure.
Higher interest rates typically exert pressure on gold, as they increase the opportunity cost of holding non-yielding assets.
Platinum and Silver Outperform Gold in Recent Weeks
Other precious metals showed mixed performance on Wednesday. Platinum futures declined by 0.2% to $1,069.00 per ounce, while silver futures gained 0.5% to $32.312 per ounce.
Despite this, both metals have significantly outperformed gold in recent weeks. Their industrial market exposure has led to speculative activity that has boosted prices in industrial markets.
Copper Steadies as Markets Await More Cues from China
Benchmark copper futures on the London Metal Exchange rose 0.6% to $10,566.50 per tonne, while one-month copper futures dipped 0.1% to $4.8715 per pound. Both contracts remained well below recent record highs, as speculative interest in industrial metals waned.
China, the top copper importer, announced additional support measures for the property sector this week. However, traders showed little enthusiasm for these moves, instead awaiting more details on how Beijing plans to implement and fund these new stimulus measures.
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