Gold prices found stability in Asian trading after bouncing back above a crucial support level on Thursday, although persistent concerns about higher U.S. interest rates limited the momentum in the precious metal.
The price of gold rebounded during overnight trading following the Federal Reserve’s decision to quash expectations of further interest rate hikes, resulting in a decline in the dollar and offering some relief to commodity prices.
However, the Fed still signaled a reluctance to initiate interest rate cuts, a stance that is anticipated to curtail significant upward movement in gold.
Spot gold held steady at $2,319.98 per ounce after dipping below $2,300 earlier in the week, while gold futures for June delivery hovered around $2,329.0 per ounce by 00:36 ET (04:36 GMT).
Mixed signals from the Fed; focus on nonfarm payrolls As widely expected, the Federal Reserve maintained interest rates at their current levels during Wednesday’s meeting.
However, in his post-meeting remarks, Chair Jerome Powell provided somewhat contradictory signals regarding the future trajectory of rates.
Powell acknowledged the persistence of disinflation, particularly concerning inflation approaching the Fed’s 2% target, which has deterred the central bank from considering early interest rate cuts. Nonetheless, Powell also indicated that the Fed did not intend to implement further rate hikes.
The latter statement led to some weakness in the dollar, easing it off near six-month highs and providing relief to metal prices, which had experienced significant losses in the lead-up to the Fed meeting.
Nevertheless, the prospect of prolonged high U.S. interest rates dampens the outlook for gold prices, especially considering the decline in demand for the safe-haven asset in recent sessions.
Other precious metals rebounded on Thursday following substantial losses earlier in the week. Platinum futures climbed 0.6% to $968.30 per ounce, while silver futures increased by 0.3% to $26.825 per ounce.
Copper prices stable below 2-year highs Meanwhile, copper prices held steady near two-year highs as uncertainty surrounding U.S. interest rates interrupted a recent surge in the industrial metal.
Three-month copper futures on the London Metal Exchange rose by 0.5% to $9,950.0 per ton, while one-month copper futures declined by 0.1% to $4.5648 per pound.
Both contracts remained below the two-year highs reached in April as market participants awaited further indications regarding economic growth and demand.
This article has been modified without altering its content. Additionally, it is noted that the content was generated with the assistance of artificial intelligence from investing.com
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