Gold prices remained within a narrow range in Asian trading on Wednesday, as a rebound seen overnight was limited by the continued strength of the dollar ahead of key signals on inflation and interest rates.
Spot Gold: Spot gold steadied at $2,179.98 an ounce in Asian trade.
Gold Futures: Gold futures expiring in April experienced marginal gains, reaching $2,178.60 an ounce by 00:25 ET (04:25 GMT).
Impact of Dollar Strength: The recent rebound in gold prices was hampered by the persistent strength of the dollar, which rose slightly in Asian trading and approached a one-month high. Dovish signals from other major central banks, such as the Swiss National Bank and the Bank of England, have kept traders favoring the dollar as the only high-yielding, low-risk currency.
Upcoming Data and Fed Comments: Traders are awaiting key signals, including the PCE price index data (the Fed’s preferred inflation gauge) and comments from top Fed officials later in the week. Anticipation of these events has spurred flows into the dollar as investors seek more cues on potential US interest rate cuts. However, the Fed is expected to initiate rate cuts only from June onwards, limiting the upside potential for gold in the near term.
Other Precious Metals: Platinum futures rose 0.1% to $918.50 an ounce, while silver futures fell 0.2% to $24.573 an ounce.
Copper Prices Decline: Copper prices extended their decline from 11-month highs, reflecting weak sentiment towards China, the top importer of the metal. Three-month copper futures on the London Metal Exchange fell 0.4% to $8,836.00 a ton, while one-month U.S. copper futures declined 0.3% to $3.9932 a pound. Despite Chinese industrial profits rising by 10.2% in the first two months of 2024, concerns persisted due to strong Chinese copper stockpiles and doubts about demand sustainability.
Overall, gold prices remained rangebound amid the prevailing strength of the dollar and cautious anticipation of upcoming economic data and Fed commentary.