Investing.com — Gold prices stabilized in Asian trading on Wednesday after hitting record highs this week as the prospect of lower U.S. interest rates battered the dollar and spurred more flows into the yellow metal.
Broader metals prices also rose, benefiting from a softer dollar and falling government bond yields, although their rate of increase slowed due to broader risk reduction in markets.
rose 0.1% to $2,515.44 per ounce, while the December expiration rose 0.1% to $2,553.35 per ounce at 00:51 ET (04:51 GMT). Spot prices hit a record high of $2,531.72 per ounce on Tuesday.
Gold supported by interest rate cuts; Powell, Fed minutes in focus
Gold and metal prices were mainly supported by continued expectations that the Federal Reserve will cut interest rates in September.
Traders were divided between a 25 or 50 basis point cut, it emerged.
The focus this week is squarely on a speech at the Jackson Hole Symposium on Friday, where he is expected to promote Fed easing. But analysts don’t expect Powell to explicitly predict potential rate cuts.
The Fed’s late July meetings will also take place later in the day, after the central bank struck a forgiving deal at the meeting.
The prospect of lower interest rates bodes well for gold as it lowers the opportunity cost of investing in non-performing assets.
This idea, combined with the recent weakness of the dollar, has been a major driver of gains in the metals markets. But much of this buying was focused on gold, while other precious metals posted marginal gains.
fell 0.1% to $956.25 per ounce, while it rose 0.1% to $29.538 per ounce.
Copper remains steady as markets weigh improved Chinese demand
Among industrial metals, copper prices rose slightly on Wednesday, extending a recovery from recent lows on signs of improving demand from top importer China.
The benchmark on the London Metal Exchange rose 0.4% to $9,222.50 per tonne, while the index rose 0.2% in one month to $2,554.10 per pound.
Data from earlier this week showed Chinese copper exports fell in July as domestic buyers took advantage of recent weakness in copper prices.
The figures showed some improvement in Chinese copper demand after copper imports to the country fell for two consecutive months.
But signs of continued economic weakness in China are still limiting overall gains for copper as the world’s largest copper importer has struggled with a post-COVID recovery for nearly two years.
