Gold prices inched higher in Asian trading on Tuesday, staying within reach of record highs as demand for the precious metal remained robust amidst expectations for further insights into U.S. inflation trends and Federal Reserve policy signals.
Having surged to record levels above $2,350 per ounce on Monday, gold experienced a slight pullback from those peaks amid strength in the dollar and Treasury yields. Nevertheless, safe-haven demand for gold remained firm, fueled by escalating geopolitical tensions in regions such as the Middle East and Russia.
Spot gold saw a 0.2% increase to $2,344.31 an ounce, while gold futures for June delivery rose 0.5% to $2,363.0 an ounce by 01:00 ET (05:00 GMT). Spot gold had touched a record high of $2,354.09 an ounce the previous day.
Focus on CPI Inflation and Fed Minutes:
Market attention is now squarely directed towards the release of the consumer price index (CPI) inflation data for March, scheduled for Wednesday. Projections suggest that U.S. inflation will persist at elevated levels, particularly following a robust nonfarm payrolls report released recently. Expectations for a Federal Reserve rate cut in June have been significantly revised downward in recent sessions.
Additionally, investors await the minutes from the Fed’s March meeting, also scheduled for release on Wednesday. While the central bank had hinted at potential interest rate cuts during the meeting, subsequent remarks from Fed officials underscored concerns about persistent inflation, suggesting a delay in any potential rate adjustments this year.
Geopolitical Concerns Provide Support:
Amidst fears of escalating geopolitical tensions, particularly in the Middle East where Iran has issued threats against Israel, demand for gold as a safe haven remains robust. Ongoing conflicts between Russia and Ukraine further contribute to the buoyancy of gold prices, with recent incidents such as strikes on the Zaporizhzhia nuclear power plant raising global alarm.
Other precious metals also advanced, with platinum futures climbing 1.4% to $990.35 an ounce, and silver futures rising 0.5% to $27.950 an ounce.
Industrial Metals Outlook:
Copper prices experienced a slight decline on Tuesday but continued to hover near 15-month highs reached last week. Three-month copper futures on the London Metal Exchange dipped 0.4% to $9,407.50 a ton, while one-month U.S. copper futures retreated 0.5% to $4.2717 a pound.
Investor attention this week remains on economic signals from China, the top importer of copper, with inflation and trade data expected later in the week. Signs of tighter copper supplies, including production cuts by leading refiners in China, have been key drivers of copper’s recent rally, further supported by optimistic purchasing managers index data from the country.