In Asian trade on Wednesday, gold prices stabilized, showing little movement amidst recent volatility, as investors awaited signals from the Federal Reserve regarding interest rate cuts in 2024.
Meanwhile, copper prices retreated sharply from recent 11-month highs due to a combination of profit-taking and the strengthening U.S. dollar, which weighed on broader metal markets.
Gold prices, although well below their record highs reached earlier in March, seemed to have found support around the $2,150 an ounce level. Spot gold hovered around $2,159.19 an ounce, while gold futures expiring in April rose by 0.1% to $2,162.15 an ounce.
Investor attention has shifted to the conclusion of the Fed meeting later in the day, where the central bank is expected to maintain interest rates at their current levels. However, any indications regarding the Fed’s plans for interest rate cuts in 2024, particularly from Fed Chair Jerome Powell’s post-meeting press conference, could influence the direction of gold prices.
The potential for a more hawkish stance from the central bank, possibly revising down its outlook for interest rate cuts this year, could negatively impact gold and other precious metals. Expectations of rate cuts in 2024 have been a driving force behind gold’s recent rally, with any divergence from this expectation likely leading to short-term weakness in the yellow metal and its counterparts.
In addition to gold, other precious metals also saw some consolidation. Platinum futures fell by 0.5% to $893.50 an ounce, while silver futures remained steady at $25.148 an ounce.
As for copper, three-month copper futures on the London Metal Exchange stabilized below the significant $9,000 a ton level, while one-month U.S. copper futures rose by 0.3% to $4.0793 a pound. Both instruments experienced a notable decline from their recent 11-month highs due to factors such as dollar strength and anticipation of the Fed’s actions, coupled with profit-taking. Further cues on copper demand are expected from key purchasing managers index readings from major global economies in the coming days.