May 9 2024: In Asian trading, gold prices remained steady, staying below recent highs amid a prevailing preference for the dollar ahead of key Federal Reserve announcements and inflation indicators.
The yellow metal showed limited demand as a safe haven due to hopes for a ceasefire between Israel and Hamas, particularly as the U.S. took steps to facilitate negotiations. However, the primary pressure on gold stemmed from expectations of sustained high U.S. interest rates, a sentiment echoed by multiple Federal Reserve officials.
Spot gold saw a slight increase to $2,313.51 per ounce, while June gold futures dipped slightly to $2,320.60 per ounce by 00:21 ET (04:21 GMT).
Gold Prices Await Fed Remarks and CPI Data
The market’s tepid response to gold mirrored ongoing caution signaled by Fed officials regarding inflation’s persistence and its implications for interest rates.
Although some investors anticipate a potential rate cut in September, the focus now shifts to forthcoming speeches from Fed representatives on Thursday and Friday. Additionally, next week’s release of the Consumer Price Index (CPI) data is expected to provide clearer signals regarding rate trajectories.
Elevated interest rates typically diminish gold’s attractiveness as they increase the opportunity cost of holding the precious metal.
In Precious Metals Markets, Other Commodities Make Modest Gains
Other precious metals showed some upward movement on Thursday but remained below recent highs. Platinum futures saw a 0.7% increase, while silver futures gained 0.5%.
Meanwhile, copper prices experienced a rise but remained below recent two-year peaks due to concerns about weakening demand reflected in China’s import data. China’s copper imports softened as recent price hikes dampened buying interest, casting some uncertainty on demand in the world’s largest copper importer.
Despite these fluctuations, copper prices have maintained a strong upward trend over the past couple of months, driven by expectations of tighter market conditions.