Investing.com–Gold prices stabilized in Asian trading on Wednesday as the focus remained squarely on coming cues on U.S. inflation and interest rates, although a somewhat hawkish view on interest rates kept traders cautious on metals markets.
Among industrial metals, copper prices also fluctuated within a range as optimism over Chinese stimulus measures cooled and traders waited for more economic signals from the world’s largest copper importer.
fell 0.1% to $2,358.93 per ounce, while rising 0.1% to $2,359.80 per ounce, ahead of their expiration this week.
Prices of the yellow metal held steady even as government bond yields firmed in overnight trading.
Gold stable, interest rate clues in focus
While the gold price was steady, it remained about $100 below last week’s record high.
The focus in metals markets has been squarely on more evidence of US rate cuts, especially as a slew of hawkish signals from the Fed led traders to steadily price down expectations for a September cut.
Minneapolis Fed President Neel Kashkari warned Tuesday that some policymakers have not ruled out further rate hikes to curb persistent inflation – a scenario that does not bode well for metals markets.
Kashkari’s comments came before a series of other Fed speakers this week, as well as data, which is the Fed’s preferred inflation gauge.
High interest rates herald greater pressure on gold as they increase the opportunity cost of investing in non-performing assets.
Platinum and silver have outperformed gold in recent weeks
Other precious metals were a mixed bag on Wednesday. fell 0.2% to $1,069.00 per ounce, while rising 0.5% to $32,312 per ounce.
But the two metals had far outperformed gold in recent weeks as their exposure to industrial markets saw them caught up in a speculative frenzy that boosted industrial markets.
Copper supports, more Chinese signals awaited
The benchmark on the London Metal Exchange rose 0.6% to $10,566.50 per tonne, while down 0.1% in the month to $4.8715 per pound.
Both contracts remained well below recent record highs as the speculative frenzy in industrial metals dried up.
Top copper importer China announced more support measures for the real estate sector this week. But traders were not happy with the move as they waited for more guidance on how Beijing will implement and finance the new stimulus measures.
The focus this week is also on key from China, expected on Friday, for more economic signals from the world’s largest copper importer.
