Gold prices surged in Asian trading on Wednesday, approaching record highs amid heightened safe haven demand following a devastating earthquake in Taiwan. The uncertainty surrounding U.S. interest rates also bolstered gold’s appeal.
The earthquake in Taiwan dealt a significant blow to risk sentiment, impacting the island’s infrastructure and top chipmaking factories. Additionally, it triggered tsunami warnings in parts of Japan, further exacerbating market jitters.
Spot gold climbed 0.3% to $2,286.40 an ounce, maintaining proximity to the record high of $2,288.43 reached on Tuesday. Meanwhile, gold futures expiring in June rose 1.1% to $2,306.25 an ounce, hovering just below the all-time highs of $2,308.85 an ounce by 00:47 ET (04:47 GMT).
The weakening of the dollar from its 4-½ month highs on Wednesday provided further support to the yellow metal.
Despite Pressure from Fed, Gold Holds Firm Above $2,300 Mark
The surge in safe haven demand has enabled gold to largely withstand concerns regarding the possibility of higher U.S. interest rates. Several Federal Reserve officials, in separate addresses, suggested that stubborn inflation and robust labor market conditions might delay the Fed’s plans to adjust interest rates. Their remarks come ahead of the release of crucial nonfarm payrolls data for March scheduled for this Friday. Recent data have consistently surpassed expectations, underscoring the resilience of the U.S. labor market.
In addition to gold, other precious metals also benefited from the increased safe haven demand and dollar depreciation. Platinum futures edged up 0.3% to $940.05 an ounce, while silver futures surged 2.2% to $26.480 an ounce.
Positive Chinese Data Boosts Copper Prices
In the realm of industrial metals, copper prices climbed on Wednesday, remaining close to recent 11-month highs, following upbeat purchasing managers index (PMI) data from China, the top importer of copper.
Three-month copper futures on the London Metal Exchange advanced 0.6% to $9,070.50 a ton, while one-month U.S. copper futures rose 0.5% to $4.1022 a pound.
Private PMI data released on Wednesday indicated an improvement in China’s services sector growth in March. This reading comes shortly after positive official PMI figures on China’s manufacturing sector, suggesting a strengthening economic backdrop in the world’s largest copper importer.