Investing.com — Gold prices fell in Asian trading on Thursday and were poised to fall below key levels as weakening safe-haven demand and the prospect of longer U.S. interest rates battered the yellow metal.
Bullion prices fell sharply from last week’s record highs as a potential conflict between Iran and Israel did not escalate as markets feared. This largely reduced safe haven demand for the yellow metal.
Declining safe-haven demand leaves gold vulnerable to U.S. yield headwinds as higher interest rates drive up the opportunity cost of investing in gold bullion.
fell 0.1% to $2,313.62 per ounce, while the June term fell 0.6% to $2,325.05 per ounce at 00:26 ET (04:26 GMT).
The strength of the economy, which remained close to recent five-month peaks, also put pressure on metal prices.
Gold looks at $2,300 support, more price indications are expected
Spot prices were now close to breaking the $2,300 per ounce support level, which could herald more losses for the yellow metal in the short term.
But gold’s next move is expected to be largely driven by more signals about the US economy and interest rates.
US first-quarter figures, due later on Thursday, are expected to show whether the world’s largest economy has remained resilient in early 2024.
Data – which is the Federal Reserve’s favorite inflation gauge – is likely to have a bigger impact on gold as it is directly tied to the central bank’s interest rate outlook.
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Better-than-expected US inflation data and hawkish signals from the Fed led traders to largely price in expectations for a rate cut in June – a scenario that puts more pressure on gold prices in the near term.
Other precious metals also retreated Thursday after falling from recent highs last week. fell 0.3% to $910.30 per ounce, while the price fell 1% to $27.078 per ounce.
The copper price continues to cool from a two-year high
In industrial metals, copper prices fell further from recent two-year highs as weak economic data and fears of high interest rates offset some of the optimism about tighter markets.
on the London Metal Exchange fell 0.2% to $9,773.0 per tonne, while the price fell 0.1% to $4.4510 per pound. Both contracts were below two-year highs reached earlier in April, after tougher Western sanctions on Russian metal exports signaled tighter markets.
But this optimism was blunted when top copper producer Chile said state copper miner Coldeco will increase production in 2024.
Concerns about stable demand also weighed on after US PMIs for April were weaker than expected as the economy returned to contraction territory.
