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Gold Prices Steady Amid Dollar Weakness; Await More Rate Signals

Gold prices maintained a narrow range in Asian trading on Wednesday, finding some support from a weaker dollar, although traders remained cautious amid expectations for further signals on interest rates.

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Spot gold edged up 0.3% to $2,330.05 an ounce, while gold futures for June delivery steadied at $2,343.15 an ounce by 00:04 ET (04:04 GMT). Despite this uptick, spot prices remained approximately $100 below the record high reached earlier in April.

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The recent decline in gold prices stemmed from reduced safe-haven demand, fueled by easing tensions between Iran and Israel. However, the weakening dollar provided some relief to gold, as most metal prices are closely tied to the dollar’s performance.

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Although the dollar softened after disappointing purchasing managers index data for April, it still retained most of its gains from April, as expectations for early interest rate cuts by the Federal Reserve diminished. The absence of escalation in the Middle East left gold vulnerable to concerns about prolonged higher interest rates, which typically dampen gold demand due to increased opportunity costs.

In the broader precious metals market, platinum futures rose 0.4% to $924.50 an ounce, and silver futures gained 0.5% to $27.485 an ounce, both buoyed by the weaker dollar despite recent losses.

Market attention shifted to forthcoming U.S. economic indicators, including first-quarter gross domestic product data scheduled for Thursday and the personal consumption expenditures (PCE) price index data, a key inflation gauge favored by the Fed, set for release on Friday. Strong U.S. inflation indicators led markets to rethink expectations of a June rate cut.

Meanwhile, copper prices advanced on Wednesday amid a softer dollar but remained below recent highs. The top copper producer, Chile, signaled plans to increase output this year, while weak U.S. PMI data indicating a surprise contraction in manufacturing activity weighed on the outlook for copper demand.

Three-month copper futures on the London Metal Exchange rose 0.8% to $9,817.50 a ton, and one-month copper futures climbed 1.1% to $4.4710 a pound.

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