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Investing.com — Gold prices tumbled in Asian trade on Thursday, following a sharp decline in the dollar after the U.S. Federal Reserve left interest rates unchanged and signaled it was considering cutting them again this year. has reached an all-time high.
It fell after the Fed meeting, dropping 0.6%, lifting the broader commodity complex. Copper prices rose towards an 11-month high, and prices of other precious metals also rose.
However, gold’s performance was outstanding, pushing it to new highs on the prospect of lower interest rates in the coming months. rose as much as 1.2% to a record high of $2,222.14 an ounce, and April expiration rose more than 2% to a record high of $2,224.80 an ounce. Both instruments pared back some gains by 22:27 ET (2:27 p.m. Japan time), but remained above the $2,200 level.
There was some consolidation in gold and the broader metals market ahead of the Fed meeting.
Fed maintains interest rate cut expectations, expectations rise for June
Fed Chairman Jerome Powell said that while there has been some resilience to recent inflation, the fundamental story of easing inflation remains the same. Add to this that Fed officials expect interest rates to fall by 75 basis points by the end of 2024.
Such a scenario bodes well for gold, especially after the yellow metal’s decline due to rising interest rates over the past two years.
Traders are currently pricing in a 73.4% chance of the Fed’s first rate cut as early as June, the paper said.
Still, the Fed has significantly revised its 2024 U.S. economic outlook upward, now expecting growth of 2.1%, down from the previously expected 1.4%. This could limit demand for safe gold amid growing optimism about a soft landing for the US economy.
Other precious metals also soared on Thursday. It rose 0.9% to $920.0 an ounce and 3.3% to $25.927 an ounce.
Copper rally resumes, PMI pays attention
On the London Metal Exchange, it rose 0.6% to $9,053.50 a tonne and rose 0.4% to $4.1078 a pound. Both contracts are close to the 11-month highs reached earlier this week.
Focus was now on a set of key Purchasing Managers’ Index readings for major economies to be released in the coming days for further potential clues on trends in copper demand.
Copper prices soared this month on the possibility of a supply shock caused by production cuts by China’s largest copper smelter.
