©Reuters.
Investing.com — Gold prices edged lower in Asian trading on Wednesday, holding on to the trading range set over the past week amid growing market uncertainty over a U.S. interest rate cut this year.
Among industrial metals, prices edged lower after copper prices rose sharply earlier this week on growing optimism about China.
Gold prices have swung from a weak start to 2024, hitting a The price fell to $2,000 per ounce.
However, the yellow metal rebounded on demand for some safe-haven assets, especially as the geopolitical situation worsened in the Middle East. This recovery has seen gold prices establish a trading range between $2,000 and approximately $2,050 per ounce over the past week.
By 12:17 a.m. ET (5:17 p.m. Japan time), the February deadline was down 0.1% at $2,024.65 an ounce.
Strength in the gold market, which traded near six-week highs on Wednesday, also weighed on gold prices.
U.S. economic indicators, Fed meeting awaited
Metals markets are now looking for more clues about when the Fed might start cutting interest rates this year.
Fourth-quarter data released on Thursday is expected to show some slowing in U.S. economic growth, while data released on Friday, the Fed's preferred measure of inflation, showed that December inflation remained It is expected that this will once again prove to be solid.
The data was released just days before the central bank was widely expected to keep interest rates on hold. But any clues about a planned rate cut will be closely watched.
While gold prices are expected to ultimately benefit from lower interest rates this year, they are likely to remain depressed in the near term, especially if the Fed holds rates steady for an extended period of time.
High interest rates increase the opportunity cost of investing in gold, making the yellow metal less attractive. However, gold still managed to rise around 10% in 2023, benefiting from demand for safe-haven assets following the outbreak of the Israel-Hamas war.
The continuing escalation of the conflict between U.S.-led forces and the Iran-aligned Houthis, which appears to have spilled into the Red Sea, continues to support some of the demand for traditional security assets.
Copper prices fall slightly due to China-led rise
The pound, which expires in March, fell 0.2% to $3.7983 per pound, but rose 0.3% this week.
Copper prices rebounded sharply this week from a nearly two-month low on reports that China is planning additional economic stimulus measures, amid rising hopes for an economic recovery in the world's largest copper importing country.
Still, copper also got off to a weak start to 2024, as a wide range of economic indicators in December showed little improvement in China's economic growth. Concerns over slowing Chinese demand have been a major weight on copper prices for the past two years.
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