Gold prices surged to near-record highs in Asian trading on Wednesday, bolstered by heightened safe-haven demand ahead of crucial U.S. inflation figures and further signals on interest rate movements.
Meanwhile, copper prices reached their highest levels in 15 months, driven by optimism surrounding the potential resurgence in global factory activity. This optimism was further fueled by expectations of reduced copper supplies.
The surge in gold prices was primarily attributed to an increase in safe-haven demand, with additional support stemming from reports of significant central bank purchases, particularly from China. Despite ongoing concerns regarding sustained high U.S. interest rates, gold continued its upward trajectory.
At 01:34 ET (05:34 GMT), spot gold climbed 0.3% to $2,359.28 per ounce, while gold futures expiring in June surged 0.6% to hit a record high of $2,377.45 per ounce. Earlier in the trading session, spot prices reached a peak of $2,365.34 per ounce.
However, the substantial gains in gold were tempered by the anticipation surrounding the upcoming release of key U.S. consumer price index (CPI) data later in the day. This data is expected to indicate persistent inflation levels for March, potentially reducing the likelihood of imminent interest rate adjustments by the Federal Reserve.
The CPI reading follows a robust nonfarm payrolls report and numerous statements from Fed officials warning against premature rate cuts due to persistent inflationary pressures. The release of the minutes from the Fed’s March meeting is also anticipated later on Wednesday.
Despite the prospect of prolonged high interest rates, gold found support from increased central bank purchases, particularly in Asian and emerging markets. Heightened concerns about an impending economic slowdown further contributed to the demand for gold.
Recent data revealed that the People’s Bank of China continued its gold purchases for the 17th consecutive month, signaling a sustained effort to hedge against economic uncertainties and potential stock market downturns.
In the realm of other precious metals, platinum futures edged upwards, reaching over three-month highs at $992.90 per ounce, while silver futures surged 1.3% to nearly three-year highs at $28.363 per ounce.
Turning to copper, three-month futures on the London Metal Exchange rose 0.4% to $9,468.0 per ton, while one-month U.S. copper futures increased by 0.2% to $4.3110 per pound. Both contracts reached their highest levels in 15 months, reflecting growing optimism regarding the outlook for copper demand amidst indications of a stabilization in global manufacturing.
Furthermore, expectations of reduced Chinese copper supplies due to impending production cuts by major refiners further supported the bullish sentiment surrounding copper prices.
Investors are eagerly awaiting additional economic signals from China, the world’s largest copper importer, later in the week. Key data on inflation and trade are scheduled for release on Thursday and Friday, respectively.