Asian markets – Gold prices experienced a slight decline in Asian trading on Tuesday but managed to hold above key support levels as investors maintained caution ahead of a significant Federal Reserve meeting later in the week. Meanwhile, copper prices dipped slightly but continued to hover near 11-month highs following a strong rally in recent sessions.
Bullion prices showed some signs of recovery this week, reclaiming the crucial $2,150 per ounce support level on Monday amidst ongoing uncertainty surrounding the Fed’s monetary policy stance. However, gold remained below its record highs seen earlier in March.
Spot gold slipped by 0.1% to $2,158.26 an ounce, while gold futures for April delivery also fell by 0.1% to $2,161.35 an ounce by 01:30 ET (05:30 GMT).
The strength of the U.S. dollar emerged as a significant factor pressuring gold prices, with traders favoring the greenback ahead of the Fed meeting. Market participants remained wary of potentially hawkish signals from the central bank, particularly in light of recent inflation data surpassing expectations.
While the Fed is widely anticipated to maintain interest rates at their current levels during the conclusion of the two-day meeting on Wednesday, concerns persist regarding any indications of a less dovish outlook, especially regarding interest rate cut forecasts.
The prospect of higher interest rates tends to weigh on gold and other precious metals, as it increases the opportunity cost of holding such assets.
In other metals, platinum futures saw a decline of 0.7% to $913.15 an ounce, while silver futures slipped by 0.3% to $25.192 an ounce.
As for copper, three-month futures on the London Metal Exchange edged lower by 0.5% to $9,046.0 a ton, while U.S. copper futures for one month dipped by 0.6% to $4.1052 a pound. Despite the slight retreat, both instruments remained close to the 11-month highs reached on Monday, driven by expectations of a deficit in Chinese refined copper supplies and upbeat industrial production data from China, the world’s leading copper importer.