Investing.com — Gold prices rose slightly in Asian trading on Wednesday after comments from Federal Reserve Chairman Jerome Powell sparked increasing speculation about when the central bank will start cutting interest rates.
Among industrial metals, copper prices fell, wiping out much of the recent recovery following mixed inflation signals from top copper importer China.
Gold saw some strength in recent sessions as it fell amid heightened expectations for a September rate cut. But the yellow metal stalled as the Fed still did not send clear signals on interest rate developments.
rose 0.2% to $2,367.73 per ounce, while the August maturity rose 0.3% to $2,373.90 per ounce at 00:20 ET (04:20 GMT).
Gold holds steady after Powell testimony, CPI data available
Prices of the yellow metal halted their recent rally after Powell signaled some cooling in the labor market and progress in curbing inflation.
But the Fed chairman reiterated the central bank’s commitment to its 2% inflation target, and gave no immediate guidance on when the Fed will start cutting rates.
While traders largely maintained their bets on a rate cut in September, Powell’s testimony added some caution before key inflation data were released on Thursday. Inflation is expected to cool further in June, albeit slightly.
The dollar found some strength after Powell’s testimony. The Fed chairman will also testify before the House of Representatives later on Wednesday.
The outlook for gold is largely tied to interest rate developments this year, especially as high interest rates have put pressure on precious metals markets over the past two years.
Other precious metals retreated on Wednesday. fell 0.3% to $997.05 per ounce, while the price fell 0.1% to $31.025 per ounce.
Silver has comfortably outperformed gold in recent months, with industrial applications giving the metal an edge over gold.
Copper prices are falling due to mixed Chinese inflation
The benchmark on the London Metal Exchange fell 0.3% to $9,844.50 per tonne, down 0.4% in the month to $4.5652 per pound.
Sentiment towards the red metal was hit by mixed inflation data from top importer China. Chinese inflation contracted in June as spending remained under pressure from China’s weak economic outlook.
While inflation contracted at the slowest pace in 16 months, the deflationary trend in China largely remained in play.
