Investing.com — Gold prices were stable in Asian markets on Wednesday as attention remained on upcoming signals regarding U.S. inflation and interest rates, but a somewhat hawkish outlook for interest rates led traders to remain cautious on the metals market.
Among industrial metals, copper prices also remained range-bound as optimism over China’s stimulus measures faded and traders awaited further economic data from the world’s largest copper importer.
It was down 0.1% to $2,358.93 an ounce before rising 0.1% to $2,359.80 an ounce ahead of this week’s expiration.
Prices of precious metals were stable despite gold and Treasury yields rising in overnight trading.
Gold stable, attention on interest rate index
Gold prices were stable but remained about $100 below the record high recorded last week.
Attention in the metals market turned to further indications of a US interest rate cut, especially after a series of hawkish signals from the Federal Reserve had traders steadily pricing in expectations of a rate cut in September.
Minneapolis Federal Reserve President Neel Kashkari warned on Tuesday that some policymakers are not ruling out further interest rate hikes to tame surging inflation, a scenario that bodes ill for metals markets.
Kashkari’s comments came ahead of data this week on the Fed’s preferred inflation measure and comments from several Fed speakers.
Higher interest rates increase pressure on gold as the opportunity cost of investing in non-yielding assets rises.
Platinum and silver outperform gold in recent weeks
Other precious metals were mixed on Wednesday, falling 0.2% to $1,069.00 an ounce while another rose 0.5% to $32.312 an ounce.
But the two metals have significantly outperformed gold in recent weeks as their exposure to the industrial market has caught up in a speculative frenzy that has boosted the industrial market.
Copper stable awaits further China data
The London Metal Exchange benchmark rose 0.6 percent to $10,566.50 a tonne, while one-month contracts fell 0.1 percent to $4.8715 a pound.
Both contracts stabilised well below their recent highs as speculative enthusiasm for industrial metals cooled.
China, the largest copper importer, announced further support for its property sector this week, but traders were not overjoyed by the move as they waited for more clues about how Beijing would implement and fund the new stimulus.
The focus this week will also depend on whether further economic data is released on Friday from China, the world’s largest copper importer.
