Investing.com — Gold prices edged up in Asian markets on Wednesday after comments from Federal Reserve Chairman Jerome Powell increased speculation about when the central bank might start cutting interest rates.
Among industrial metals, copper prices fell, losing much of their recent recovery following mixed inflation signals from China, the largest copper importer.
Gold has seen some gains in recent trading as it fell amid growing hopes of a September interest rate cut, but it has stagnated as the Fed remains short of a clear signal on where interest rates will go.
As of 00:20 ET (04:20 GMT), it was up 0.2% to $2,367.73 an ounce, while August maturities were up 0.3% to $2,373.90 an ounce.
Gold steadies after Powell’s testimony, CPI data release
Gold prices halted their recent gains after Chairman Powell signaled progress in cooling the labor market and taming inflation.
But the Fed chairman reiterated the central bank’s 2% inflation target and gave no direct indication of when the Fed might start cutting rates.
Traders largely maintained their expectations for a September rate cut, but Powell’s testimony added caution ahead of a key inflation reading due for release on Thursday that is expected to show inflation slowing slightly further in June.
The dollar strengthened slightly following testimony from Powell, who is also due to testify before the House of Representatives later Wednesday.
Gold’s outlook will depend heavily on interest rate trends this year, especially as high interest rates over the past two years have put pressure on the precious metals market.
Other precious metals fell on Wednesday, dropping 0.3% to $997.05 an ounce and 0.1% to $31.025 an ounce.
Silver has significantly outperformed gold in recent months due to its superior industrial uses.
Copper prices fall as China inflation mixed
The London Metal Exchange’s benchmark price was down 0.3 percent to $9,844.50 a tonne, while one-month contracts were down 0.4 percent to $4.5652 a pound.
Sentiment towards gold was dampened by mixed inflation data from China, the largest importer. Chinese inflation fell in June as spending pressures continued due to China’s weak economic outlook.
Inflation fell to the slowest pace in 16 months, but China’s deflationary trend remains broadly persistent.
