Investing.com — Gold prices steadied in Asian trading Thursday, hovering near record highs as traders bought into the yellow metal ahead of further cues on U.S. inflation and interest rates.
Among industrial metals, copper prices rebounded from recent declines and rose towards an 11-month high after reports that Chinese copper smelters were proposing to cut production.
Bullion prices have regained much of their losses this week as hopes persist that the Federal Reserve could cut interest rates as early as June. However, strength near one-month highs pushed gold prices just below the record high.
The April expiry was steady at $2,215.80 an ounce by 1:09 pm ET (5:09 p.m. Japan time), while it was steady at $2,195.34 an ounce. The spot price was just below last week’s all-time high of $2,222.90 an ounce.
Gold price stabilizes after PCE data, Fed speaker pays attention
The focus now was squarely on data to be released on Friday, the Fed’s recommended measure of inflation. Any signs of slowing inflation are likely to trigger a strong rally in metals markets, as the likelihood of early interest rate cuts increases.
Along with the PCE data, additional addresses for and will also be submitted on Friday. Their signals on rate cuts will be closely watched this week after other Fed officials struck a slightly more hawkish tone.
Governor Christopher Waller warned that the central bank is in no hurry to start cutting interest rates, citing the persistence of inflation and the resilience of the U.S. economy.
Rising interest rates over time bode poorly for gold prices, as they increase the opportunity cost of investing in bullion.
This idea continued to put pressure on other precious metals as well. It rose 0.3% to $914.0 per ounce, while remaining flat at $24.777 per ounce.
Copper prices rebound on expectations for China’s supply cuts
On the London Metal Exchange, it rose 0.5% to $8,913.0 a tonne and rose 0.4% to $4.0303 a pound.
Reuters reported that major Chinese copper smelters are considering cutting production and have not set guidance for copper prices for the second quarter.
Copper prices soared in early March, hitting an 11-month high following reports of production cuts in China that predicted a tightening of the refined copper market.
However, these gains were offset by data showing that Chinese copper inventories remained strong, suggesting the market may not be as tight as initially expected.
