Investing.com — Gold prices fell in Asian trading on Tuesday, retreating from record highs as some easing uncertainty over Iran cooled safe-haven demand for the yellow metal, while pressure from concerns over US interest rates continued.
In industrial metals, copper’s rally to record highs also reversed course on Tuesday amid some profit-taking and as traders gauged the red metal’s potential this year.
Gold rose to a record high on Monday, benefiting from increased safe-haven demand as traders feared some geopolitical instability in the Middle East after Iran’s president was killed in a helicopter crash. But the immediate impact of his death remained unclear.
fell 0.5% to $2,413.77 per ounce, while the June term fell 0.9% to $2,416.75 per ounce at 00:59 ET (04:59 GMT). Spot gold hit an all-time high of nearly $2,450 on Monday.
Gold is stagnating as demand for safe havens declines and interest rate fears persist
The lack of any major instability in the Middle East undermined demand for gold as a safe haven, making it more vulnerable to concerns about US interest rates.
A series of Federal Reserve officials warned Monday that the central bank needed much more convincing that inflation was easing before it could start cutting interest rates. The central bank will probably keep interest rates high for longer.
The market firmed as markets now position themselves for the Fed’s late-April meeting, due to take place on Wednesday, which in turn put pressure on broader metals prices and capped a price rally.
High long-term interest rates reduce the appeal of non-yielding assets such as gold by increasing the opportunity cost of investing in them.
Other precious metals also fell on Tuesday. fell 1.6% to $1,042.60 per ounce, while the price fell 2.5% to $31.628 per ounce. But both metals retained much of their gains from the past few sessions.
Copper is coming off record highs
Copper prices fell sharply from Monday’s record highs as investors took a step back to see how much potential the red metal had this year.
Copper’s recent rally was largely fueled by a speculative frenzy over a potential supply shortage of the red metal, which in turn had caused a short squeeze on the Comex exchange and led to even more gains.
But we saw these gains cool on Tuesday, with the focus on whether copper supplies could be sourced in time to meet immediate demand.
on the London Metal Exchange fell 1.3% to $10,825.0 a tonne after hitting a record high above $11,100 on Monday.
fell 1.1% to $5.0510 per pound, also retreating from record highs.
