Investing.com — Gold prices held in a narrow range in Asian trade on Wednesday as an overnight rebound was largely stalled by a stronger dollar ahead of further important signals on inflation and interest rates.
The yellow metal has fallen from record highs over the past two weeks as dovish signals from other major central banks kept traders largely biased towards the dollar. Asian trade rose slightly, with one-month highs within sight.
Prices for the April expiry rose slightly to $2,178.60 per ounce at 12:25 ET (4:25 p.m. Japan time), before holding steady at $2,179.98 per ounce.
Gold weighs on dollar strength ahead of PCE statistics, Fed comments
Gold prices registered modest gains in overnight trading, but continued strength in the dollar slowed further gains.
Traders remained largely biased towards the dollar after dovish signals from the Swiss National Bank and the Bank of England pegged it as the only high-yielding, low-risk currency.
Expectations for the central index, the Fed’s preferred measure of inflation, and comments from Fed officials later this week also fueled flows into the dollar, especially as traders awaited further clues about a U.S. interest rate cut.
However, the Fed is still expected to start cutting interest rates in June, and gold’s upside will be limited in the meantime. The yellow metal is still expected to benefit from lower interest rates towards the end of the year.
Other precious metals rose 0.1% to $918.50 an ounce, while falling 0.2% to $24.573 an ounce.
Copper prices edge lower as China outlook remains weak
Among industrial metals, copper prices extended their decline from Wednesday’s 11-month high as sentiment toward China, the largest importer, remained weak.
On the London Metal Exchange, it fell 0.4% to $8,836.00 a tonne and fell 0.3% to $3.9932 a pound.
Wednesday’s data showed a 10.2% increase in the first two months of 2024. However, much of this increase was driven by a decline in comparative standards from the previous year.
Optimism about Chinese demand also faded in recent trades as inventory data showed that Chinese copper inventories remain strong so far in 2024. This offset expectations for a copper supply shock after several major Chinese refineries signaled plans to cut production.
