Investing.com — Gold prices held steady in Asian trading Friday, with traders remaining wary of the yellow metal ahead of key U.S. inflation data that is likely to play a role in the interest rate outlook.
Among industrial metals, copper prices fell, following weaker-than-expected purchasing managers’ index data from top importer China.
Metals markets saw some relief on Friday after falling from two-week highs in overnight trading, following weak data. But this relief was limited as fears of persistent inflation and high interest rates persisted ahead of the key inflation figures.
was steady at $2,342.86 per ounce, while the August expiration at 00:19 ET (04:19 GMT) fell 0.1% to $2,363.80 per ounce. The yellow metal is still expected to rise about 2.6% in May after shooting to record highs earlier this month.
Trimming gold May wins, PCE test looms
But gold is now trading about $100 below its record high in May as fears of prolonged high interest rates in the US led to some profit-taking in the yellow metal.
A series of Federal Reserve officials warned in recent weeks that the central bank had little confidence to start cutting interest rates amid stubborn inflation.
This put the numbers – which are the Fed’s favorite inflation gauge – on full display. The figures will be released later on Friday and are expected to show that inflation cooled slightly in April but remains well above the Fed’s annual target of 2%.
High interest rates for any length of time do not bode well for gold and other precious metals as they drive up the opportunity cost of investing in this sector.
Platinum and silver deliver huge gains in May
Other precious metals fell on Friday as there was also some profit-taking following strong gains in May. fell 0.6% to $1,028.95 per ounce, while it fell 1.6% to $31,030 per ounce. But the two metals rose 9% and 17% respectively in May as they benefited from exposure to a speculative frenzy that sent industrial metals prices soaring.
Both platinum and silver have some industrial uses.
Copper prices are falling due to weak Chinese PMIs
The benchmark on the London Metal Exchange held steady at $10,141.0 per tonne, while the price fell 0.5% in one month to $4.6350 per pound.
Both contracts wiped out much of their gains in May, despite hitting record highs, as the speculative frenzy died down and gave way to serious profit-taking.
Sentiment towards copper was also hit by weaker-than-expected PMI data from top copper importer China. China’s economy contracted unexpectedly in May, but grew at a slower pace.
