Gold prices experienced slight gains during Asian trading on Wednesday, with limited support from safe-haven demand as recent statements from Federal Reserve officials prompted speculation about potential interest rate adjustments.
The precious metal saw some interest as a safe-haven asset this week, particularly as tensions between Israel and Hamas escalated, although talks of a ceasefire made little progress.
However, the safe-haven buying was counteracted by concerns over the possibility of higher U.S. interest rates and a resurgence in the value of the dollar.
Spot gold edged up by 0.2% to reach $2,317.70 per ounce, while gold futures expiring in June stabilized at $2,325.40 per ounce by 00:12 ET (04:12 GMT). Spot prices remained over $100 below the record high seen in late April.
Gold Faces Pressure as Fed Officials Temper Rate Cut Expectations
The price of gold received minimal support from the recent decline in the value of the dollar, as the greenback rebounded on Tuesday following remarks from several Federal Reserve officials indicating a likelihood of maintaining current interest rates through 2024.
Minneapolis Fed President Neel Kashkari reinforced this notion on Tuesday, prompting traders to reassess their expectations for potential rate cuts this year.
While expectations for a rate cut in September had increased following weak payroll data the previous week, Kashkari and his colleagues highlighted persistent concerns about inflation as a significant factor for the Federal Reserve.
The anticipation of sustained high U.S. interest rates presents a challenge for gold, as it raises the opportunity cost of investing in the precious metal.
Other precious metals experienced mixed performance amidst concerns over U.S. interest rates. Platinum futures remained steady at $988.35 per ounce, while silver futures rose by 0.3% to $27.635 per ounce.
Copper Prices Retreat Due to Mixed Supply Signals and Caution from China
In the realm of industrial metals, copper prices declined from two-year highs on Wednesday, as expectations of tighter supplies were somewhat offset by U.S. miner Freeport-McMoRan flagging exports of up to 900,000 metric tons of copper concentrate from its Grasberg mine in Indonesia.
The potential increase in exports partially counteracted expectations of tighter supplies following stricter sanctions on Russian metal exports and production cuts by Chinese refiners.
Three-month copper futures on the London Metal Exchange fell by 0.5% to $9,974.50 per ton, while one-month copper futures dropped by 0.4% to $4.5732 per pound.
Market attention also turned to trade data from China, a key importer of copper, scheduled for release on Thursday. The data is expected to provide further insights into metal demand within the country.