In Asian trading on Thursday, gold prices stabilized, hovering near record levels as traders positioned themselves ahead of forthcoming U.S. inflation and interest rate indicators.
Meanwhile, copper prices experienced a resurgence after recent declines, edging back towards eleven-month highs following reports indicating potential output reductions by Chinese copper smelters.
Gold Prices Maintain Stability with Eyes on PCE Data and Fed Speeches
Spot gold maintained its position at $2,195.34 per ounce, while gold futures for April delivery steadied at $2,215.80 per ounce by 01:09 ET (05:09 GMT). Spot prices lingered just below the record peak of $2,222.90 per ounce attained last week.
Market attention is now concentrated on the release of the Personal Consumption Expenditures Price Index (PCE), the Federal Reserve’s preferred inflation gauge, scheduled for Friday. Any indications of moderating inflation are anticipated to trigger significant gains in precious metal markets, as they heighten the likelihood of early interest rate adjustments.
Alongside the PCE data, remarks from Fed Chair Jerome Powell and Federal Open Market Committee (FOMC) member Mary Daly are slated for Friday. Market participants await cues from these individuals regarding potential interest rate cuts, particularly in light of somewhat hawkish sentiments expressed by other Fed officials earlier in the week.
Governor Christopher Waller emphasized that the central bank is not hastening to initiate rate reductions, citing persistent inflation and the robustness of the U.S. economy. The prospect of prolonged higher interest rates poses challenges for gold prices, as they elevate the opportunity cost associated with investing in bullion.
This sentiment exerted downward pressure on other precious metals as well. Platinum futures edged up 0.3% to $914.0 per ounce, while silver futures remained steady at $24.777 per ounce.
Copper Prices Rally on Prospects of Chinese Supply Reductions
Three-month copper futures on the London Metal Exchange climbed 0.5% to $8,913.0 per ton, while one-month U.S. copper futures rose 0.4% to $4.0303 per pound.
Reports surfaced suggesting that major Chinese copper smelters are contemplating output cuts, with no specific guidance provided for copper prices in the second quarter. These developments, signaling potential tightening in refined copper markets, contributed to sharp gains in copper prices earlier in March, propelling them to eleven-month highs.
However, these advances were somewhat tempered by data indicating that Chinese copper inventories remained robust, suggesting that market conditions might not be as constrained as initially anticipated.