Investing.com — Gold prices rose slightly in Asian trading on Wednesday, leaving recent record highs in sight as traders waited to see how much the Federal Reserve would cut interest rates.
Bullion prices briefly hit record highs this week as expectations for a 50 basis point cut grew, denting the dollar and Treasury yields. But some stronger-than-expected U.S. data complicated expectations of a major rate cut.
rose 0.2% to $2,574.15 per ounce, while it was up 0.3% to $2,600.40 per ounce at 00:16 ET (04:16 GMT).
Gold just below record highs, with interest rate cuts in sight
Spot prices were just below a record high of $2,589.78 per ounce earlier this week.
The biggest support for Gold was growing belief that the Fed will do so at the end of a meeting later on Wednesday.
While markets were initially divided between a 25 or 50 basis point cut, recent sessions have seen expectations shift toward a 50 basis point cut.
Bets on a 50 basis point cut persisted even as recent inflation data appeared stronger than expected, reflecting some resilience in the US economy.
But concerns about a weakening labor market are expected to prompt the Fed to initiate an easing cycle that could cut rates by at least 100 basis points by the end of 2024.
Lower interest rates bode well for gold and other precious metals as they herald lower opportunity costs for investing in non-performing assets.
But other precious metals lagged gold, down 0.5% to $983.90 an ounce, while down 0.5% to $30.837 an ounce.
Copper falls as Chinese markets reopen
Among industrial metals, copper prices fell on Wednesday as markets in top importer China reopened after a long weekend, with local traders reacting to weaker economic data from the country.
The benchmark on the London Metal Exchange fell 0.6% to $9,326.50 per tonne, while the index fell 0.9% in one month to $4.2475 per pound.
Weak industrial production and retail sales data from China released over the weekend pointed to continued weakness in the country’s biggest economic engines, which traders feared could further dent appetite for copper.
But the weak data also raised some expectations that Beijing will be forced to roll out more stimulus, which could boost growth in the near term and help boost copper demand.
This idea helped limit overall losses in copper.
