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HomeGoldGold Prices Retreat from Record Highs, Near $2,150 After Strong CPI Data
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Gold Prices Retreat from Record Highs, Near $2,150 After Strong CPI Data

Gold prices stabilized in Asian trade on Wednesday but remained lower after experiencing a decline from record highs. The pullback occurred following a robust U.S. inflation reading, which heightened concerns about the possibility of higher interest rates persisting for an extended period.

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Spot gold steadied at $2,159.32 per ounce, while gold futures expiring in April dropped 0.1% to $2,164.45 per ounce by 00:13 (04:13 GMT). Both instruments were down approximately 2% each from the record highs reached earlier in the week. Spot gold had reached a peak of $2,195.20 per ounce, while gold futures hit $2,203.0 per ounce on Monday.

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The release of consumer price index (CPI) data revealed that U.S. inflation grew slightly more than expected in February, remaining well above the Federal Reserve’s 2% annual target. This data reduced expectations of early interest rate cuts by the Fed, impacting gold prices.

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Despite the setback, traders still maintained bets on a 70% chance for a 25 basis point rate cut in June, according to the CME Fedwatch tool. The focus now shifts to upcoming economic indicators like the producer price index and retail sales readings for further cues on the U.S. economy.

Gold and other precious metals also faced pressure from the overnight strength in the U.S. dollar and rising U.S. Treasury yields. Platinum futures steadied around $927.90 per ounce, while silver futures declined 0.4% to $24.297 per ounce.

In the industrial metals sector, copper futures expiring in May experienced a 0.2% decline to 3.9283 per pound. Despite recent strength on hopes of increased stimulus measures from China to support economic recovery, concerns persisted about the country’s economic outlook, particularly after setting a somewhat underwhelming GDP target of 5% for 2024, matching that of 2023.

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