Gold prices remained within a narrow range during Asian trading on Wednesday, with any further declines in the precious metal limited by a weakening dollar. However, traders remained cautious due to the anticipation of more signals regarding interest rates.
Gold prices have experienced a significant drop from their recent record highs, largely due to easing tensions surrounding the conflict between Iran and Israel, which has reduced safe-haven demand for the metal.
Spot gold saw a modest increase of 0.3% to $2,330.05 per ounce, while gold futures for June delivery stabilized at $2,343.15 per ounce as of 00:04 ET (04:04 GMT). Despite this, spot prices were still approximately $100 below the record high reached earlier in April.
The weakening dollar provided some relief for gold prices, as it declined in overnight trading following softer-than-expected purchasing managers index data for April. However, the dollar maintained most of its gains made throughout April, as expectations for early interest rate cuts by the Federal Reserve diminished.
While safe-haven demand initially supported gold against these challenges, the lack of escalation in the Middle East has left the metal susceptible to concerns about prolonged higher interest rates, which are unfavorable for gold due to increased opportunity costs.
In Asian trade, other precious metals also rose against a weaker dollar but were still recovering from recent losses. Platinum futures increased by 0.4% to $924.50 per ounce, while silver futures rose by 0.5% to $27.485 per ounce.
Market attention was focused on upcoming key U.S. economic data, particularly the first-quarter gross domestic product (GDP) data scheduled for Thursday and the Personal Consumption Expenditures (PCE) price index data, which is the Federal Reserve’s preferred inflation gauge, set to be released on Friday. Recent indicators showing persistent U.S. inflation led to reduced expectations for a rate cut in June.
Copper prices also rose on Wednesday, benefiting from a softer dollar, although they remained below recent peaks. Weak U.S. PMI data, indicating an unexpected contraction in manufacturing activity, dampened the outlook for copper demand. Three-month copper futures on the London Metal Exchange increased by 0.8% to $9,817.50 per ton, while one-month copper futures rose by 1.1% to $4.4710 per pound.
This article has been generated and translated with the assistance of artificial intelligence. Source: investing.com.
