Investing.com — Gold prices stayed within a tight range in Asian trading on Wednesday as further losses in the yellow metal were capped by a weaker dollar, although expectations of more interest rate signals kept traders wary of the yellow metal .
Bullion prices fell sharply from recent record highs as easing tensions over a war between Iran and Israel wiped out demand for the yellow metal as a safe haven.
rose 0.3% to $2,330.05 per ounce, while the June maturity was flat at $2,343.15 per ounce at 00:04 ET (04:04 GMT). Spot prices are now trading about $100 away from a record high earlier in April.
The dollar’s weakness provides limited relief for gold prices
Overnight trading fell after softer-than-expected April data.
The dollar’s weakness helped counter a recent decline in gold prices, as most metal prices are pegged to the dollar.
But the dollar still retained much of the gains made so far in April, as markets steadily priced in expectations of early rate cuts by the Federal Reserve.
While safe-haven demand had initially helped gold overcome these headwinds, a lack of escalation in the Middle East now left the precious metal vulnerable to longer-term interest rate fears.
High interest rates do not bode well for gold as they increase the opportunity cost of investing in the yellow metal.
Other precious metals rose in Asian trading against a weaker dollar but still posted steep losses in recent sessions. rose 0.4% to $924.50 per ounce, while the price rose 0.5% to $27.485 per ounce.
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GDP and PCE inflation data awaited more interest rate signals
The market’s focus was now squarely on key upcoming US economic data, which may provide further clues about interest rates.
First-quarter figures are due on Thursday, while the numbers – the Fed’s favorite inflation gauge – are due on Friday.
Recent indicators of persistent US inflation led markets to price in expectations for a rate cut in June.
Copper prices are rising, but remain below recent peaks
Among industrial metals, copper prices rose on Wednesday, also benefiting from a softer dollar. But prices of the red metal were still below recent two-year highs after top producer Chile signaled it planned to increase production this year.
The outlook for copper demand was also negatively affected by weak US PMI data, which showed an unexpected contraction.
on the London Metal Exchange rose 0.8% to $9,817.50 a tonne, while it rose 1.1% to $4.4710 a pound.
