Gold prices remained relatively stable during Asian trading hours on Wednesday, showing signs of consolidation amidst recent volatility. Investors kept a keen eye on the Federal Reserve for indications regarding potential interest rate adjustments in 2024.
Meanwhile, copper prices experienced a notable retreat from their 11-month highs, driven by a combination of profit-taking activities and the dollar’s strength, which exerted pressure on the broader metal markets.
Although bullion rates remained notably below the peak levels recorded earlier in March, they seemed to have found a supportive level around $2,150 per ounce.
Spot gold was observed hovering around $2,159.19 per ounce, while gold futures for April delivery displayed a marginal increase of 0.1%, reaching $2,162.15 per ounce by 00:37 ET (04:37 GMT).
Investor attention shifted towards the conclusion of the Federal Reserve meeting scheduled later in the day. The central bank’s decision to maintain interest rates at their current levels was widely anticipated. However, market participants awaited clues regarding the Fed’s stance on potential rate cuts for the remainder of 2024, particularly during the press conference featuring Fed Chair Jerome Powell.
Speculation persisted that the central bank might adopt a hawkish tone and revise its outlook for interest rate cuts, especially in light of recent inflation figures surpassing expectations over the past two months.
The prospect of prolonged higher interest rates poses a downside risk for gold and other precious metals. The anticipation of rate cuts in 2024 had been a significant catalyst behind gold’s recent upward trajectory, making any deviation from this expectation likely to signal near-term weakness in the yellow metal and its counterparts.
In the realm of other precious metals, platinum futures experienced a decline of 0.5%, settling at $893.50 per ounce, while silver futures stabilized at $25.148 per ounce.
Turning attention to copper, three-month futures on the London Metal Exchange maintained levels below the critical threshold of $9,000 per ton, whereas one-month U.S. copper futures recorded a modest uptick of 0.3%, reaching $4.0793 per pound.
Both copper instruments underwent a substantial decline from their 11-month peaks earlier in the week, driven by the dollar’s strength and anticipation surrounding the Federal Reserve’s policy decisions. The initial boost, attributed to prospects of reduced Chinese copper output, seemed to have waned.
Market focus is now directed towards forthcoming Purchasing Managers Index (PMI) readings from major global economies, expected to provide further insights into copper demand trends.
