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Gold prices tread water as dollar firms before Fed, inflation cues

Published 05/09/2024, 12:34 AM
© Reuters.

Investing.com-- Gold prices moved little in Asian trade, hovering well below recent record highs as investors remained largely biased towards the dollar before more cues on the Federal Reserve and inflation. 

The yellow metal saw limited safe haven demand amid some expectations of a Israel-Hamas ceasefire, especially as the U.S. now appeared to be making a greater effort to broker a deal. The Biden Administration reportedly suspended arms exports to Israel over its attacks on Rafah.

But the biggest pressure on gold remained the prospect of high for longer U.S. interest rates, especially after several Fed officials warned of such a scenario. 

Spot gold rose 0.2% to $2,313.51 an ounce, while gold futures expiring in June fell 0.1% to $2,320.60 an ounce by 00:21 ET (04:21 GMT). 

Gold prices muted with more Fed speakers, CPI data on tap 

The yellow metal saw little love as a string of Fed officials warned that sticky inflation will deter any plans to cut rates in the near-term.

While markets still held out hope for a September rate cut, focus was now on addressed from more Fed officials, due on Thursday and Friday.

Beyond that, key consumer price index data for April is due next week, and is likely to offer up definitive signals on the path of interest rates.

High for longer rates bode poorly for gold, given that they push up the opportunity cost of investing in the yellow metal.

Other precious metals advanced on Thursday, but were still trading well below recent peaks. Platinum futures rose 0.7%, while silver futures added 0.5%. 

Copper prices pinned below 2-year highs, China imports slide 

Among industrial metals, copper prices rose on Thursday, but remained pinned well below recent two-year peaks as weak Chinese import data fueled some doubts over demand.

Three-month copper futures on the London Metal Exchange rose 0.3% to $9,940.00 a ton, while one-month copper futures rose 0.4% to $4.5592 a pound. 

Government data showed on Thursday that while China’s overall imports rose substantially more than expected in April, the country’s copper imports softened as recent price increases dampened demand. 

The reading raised some doubts over strong demand in the world’s biggest copper importer. 

Still, expectations of tighter markets kept copper prices sitting on a stellar run-up over the past two months.

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