In Asian trading on Wednesday, gold prices experienced a decline, relinquishing some recent gains as the dollar rebounded. This shift occurred amid uncertainty regarding the timing of the Federal Reserve’s interest rate cuts in 2024.
Gold had witnessed a strong surge in the final trading days of 2023, driven by growing optimism about potential Fed rate cuts as early as March 2024. Although spot gold remained within $100 of the record high set in early December, markets sought more confirmation of the Fed’s commitment to early rate cuts.
The dollar rebounded sharply from nearly five-month lows on Tuesday, contributing to gold’s retreat. Spot gold steadied at $2,064.16 per ounce, while February gold futures dipped slightly to $2,072.40 per ounce.
Copper Prices Decline Amid China Concerns
In the realm of industrial metals, copper prices fell slightly on Wednesday, extending recent losses following weak economic data from China, a major importer. Copper futures for March fell 0.1% to $3.8652 per pound, moving further away from a five-month high achieved in late December. The strength of the dollar also contributed to the pressure on copper prices.
Concerns about China’s economic weakness weighed on copper markets, especially as a post-COVID economic rebound did not materialize as expected in 2023. Additionally, market participants awaited U.S. purchasing managers index data for December later on Wednesday.