Investing.com — Gold prices fell in Asian trading on Wednesday, retreating further from record highs as concerns grew about high U.S. interest rates ahead of more signals from the Federal Reserve.
The losses extended to industrial metals, with copper prices retreating further from recent record highs as the speculative frenzy in the red metal cooled ahead of more signals on physical supply and overall demand.
Stable conditions also weighed on metals prices as safe haven demand for gold cooled amid little sign of deteriorating geopolitical conditions in the Middle East after Iran’s president was killed in a helicopter crash.
fell 0.2% to $2,415.61 per ounce, while the June term fell 0.3% to $2,418.75 per ounce at 00:23 ET (04:23 GMT). Spot prices were still within sight of their recent peak of $2,450.06 per ounce.
Gold hit by interest rate swings as Fed minutes loom
The , expected later on Wednesday, were now in focus for more signals from the central bank.
The Fed had kept rates steady at the meeting, with Chairman Jerome Powell still hinting at the possibility of rate cuts in 2024. Traders will wait to see if this was the case with all Fed officials, especially as inflation remained stubborn.
A series of Fed officials warned this week that the central bank needed more confidence that inflation would fall before it could start cutting rates. Their comments supported the dollar and put pressure on most risky and non-yielding assets.
High interest rates do not bode well for gold as they increase the opportunity cost of investing in the yellow metal. While increased safe-haven demand had pushed gold to record highs at the start of the week, a lack of escalation in the Middle East left the yellow metal vulnerable to interest rate pressure.
Other precious metals also retreated on Wednesday. fell 0.4% to $1,058.35 per ounce, while it fell 0.4% to $31,950 per ounce.
A speculative frenzy in the metals markets pushed silver prices to a 12-year high earlier this week, although the rally now appears to be cooling. Platinum prices were also near a one-year high.
Copper prices are retreating as bulls catch their breath
fell 0.9% to $10,730.0 per tonne on Wednesday, while it fell 0.8% to $5.0595 per pound. Both contracts fell further from the record highs of early this week.
A speculative frenzy – most notably a short squeeze on the Comex exchange – that had fueled copper’s recent surge now appeared to have stalled as traders waited to see if physical copper supplies could meet needs.
Cooling optimism about China – the world’s largest copper importer – also caused some price declines as traders waited to see how Beijing would implement the recently outlined stimulus measures.
