Investing.com — Gold prices fell slightly in Asian trading on Wednesday but remained within sight of a record high as traders positioned for signs of easing consumer inflation following a soft reading on producer inflation.
The dollar fell close to an eight-month low on Tuesday after soft inflation readings helped most metal prices. But further gains in metals markets were held back by some caution ahead of Wednesday’s consumer price index.
fell 0.2% to $2,461.11 per ounce, while the December expiration at 00:43 ET (04:43 GMT) fell 0.3% to $2,500.40 per ounce.
Gold holds record highs as CPI approaches
Gold futures hit record highs this week, while spot prices hit a record high of $2,483.78.
The gains in the yellow metal came as dovish inflation data on Tuesday reinforced expectations that the Federal Reserve will cut rates by 50 basis points in September, although markets were still pricing in the potential for a 25 basis point cut.
The softer PPI value increased hopes that later on Wednesday it will also appear that inflation has fallen in July.
Lower interest rates bode well for the yellow metal as they reduce the opportunity cost of investing in non-performing assets.
Gold also saw demand for safe havens increase this week after reports suggested Iran was planning to hit back against Israel following the assassination of a Hamas leader in Tehran earlier this week. According to reports, Hamas had launched several rockets at Tel Aviv.
Other precious metals were mixed on Wednesday. fell 0.7% to $939.95 per ounce, while it rose 0.2% to $27.832 per ounce.
Buyer sees some gains due to fears of supply disruption
Among industrial metals, copper prices fell on Wednesday but recovered some lost ground in recent sessions after a major union strike at BHP’s Escondida mine in Chile, which accounts for almost 5% of global copper supplies.
Production at the mine was limited and any chance of a prolonged strike created a supply shortage for copper markets.
Copper prices rose sharply in 2017 after the union held a 44-day strike – its longest yet.
The benchmark on the London Metal Exchange fell 0.2% to $8,963.0 per tonne, while the index fell 0.4% in one month to $4.0450 per pound.
Both contracts posted some gains this week after concerns about Chinese demand sent copper prices tumbling to four-month lows.
More economic signals from China will follow on Thursday, now that data are available.
