Gold prices remained within a tight range during Asian trading on Wednesday. While a weaker dollar provided some support, limiting further losses, traders remained cautious amid anticipation of more interest rate-related cues. Gold’s recent sharp decline from record highs was attributed to easing tensions between Iran and Israel, which diminished its appeal as a safe-haven asset. Spot gold edged up 0.3% to $2,330.05 per ounce, while June gold futures held steady at $2,343.15 per ounce by 00:04 ET (04:04 GMT). Spot prices traded approximately $100 below their record high reached earlier in April. The dollar’s overnight decline, prompted by weaker-than-expected purchasing managers index data for April, offered some respite to gold prices. A weaker greenback typically supports gold, as most metal prices are pegged to the dollar. However, the dollar has maintained a significant portion of its gains accumulated in April, as markets continue to factor out expectations of early interest rate cuts by the Federal Reserve. While safe-haven demand initially propelled gold higher despite these headwinds, the absence of further escalation in the Middle East has left bullion vulnerable to fears of prolonged higher interest rates. Elevated rates are unfavorable for gold, as they increase the opportunity cost of investing in the yellow metal. Other precious metals, including platinum and silver, also rose during Asian trading due to the weaker dollar but remained below their recent lows. Platinum futures gained 0.4% to $924.50 per ounce, while silver futures climbed 0.5% to $27.485 per ounce. Market participants are now focusing on upcoming key U.S. economic data, particularly first-quarter gross domestic product and PCE price index data (the Fed’s preferred inflation gauge), for further guidance on interest rate expectations. Recent indicators have suggested persistent inflation in the U.S., leading markets to discount the possibility of a rate cut in June. Among industrial metals, copper prices advanced on Wednesday, also benefiting from the softer dollar. However, prices remained below recent two-year highs, following signals from top producer Chile indicating plans to increase output this year. Weak U.S. PMI data, which revealed an unexpected contraction in manufacturing activity, also dampened the outlook for copper demand.
Gold Flat, Dollar Weakness Offers Limited Respite Amid Rate Hike Woes
