In Asian trading on Tuesday, gold prices experienced a decline, stepping back from their record highs as traders opted to secure profits in anticipation of crucial U.S. inflation data. This data is widely anticipated to influence the trajectory of interest rates.
The surge in gold prices to new record highs in March, approaching $2,200 an ounce, was initially driven by growing expectations of interest rate cuts, possibly as early as June, and increased demand for safe-haven assets.
However, this upward momentum eased in recent sessions, particularly following somewhat hawkish signals from the Federal Reserve and mixed labor market data. The stabilization of the dollar, contributing to pressures on metal markets, also played a role.
As of 01:24 ET (05:24 GMT), spot gold experienced a 0.2% decline, reaching $2,178.43 an ounce, while gold futures expiring in April fell by a similar percentage to $2,184.65 an ounce. Both instruments were trading approximately $15 below the peak levels recorded last week.
Attention has now shifted to the upcoming U.S. Consumer Price Index (CPI) data scheduled for later on Tuesday, which is expected to provide insights into potential interest rate adjustments. Projections suggest that inflation remained elevated in February, surpassing the Federal Reserve's 2% annual target.
The market is keenly observing this inflation data, especially after remarks from several Fed officials, notably Fed Chair Jerome Powell, indicating that the timing and extent of any rate cuts this year would closely align with inflation trends.
Gold is poised to benefit from significant interest rate reductions this year, a key factor driving its recent rally. Meanwhile, other precious metals experienced declines on Tuesday after registering notable gains in recent sessions.
Platinum futures fell by 0.5% to $938.0 an ounce, and silver futures saw a 0.1% decline to $24.685 an ounce.
In the realm of industrial metals, copper prices witnessed a decline on Tuesday but maintained some gains from the past week, buoyed by hopes for additional stimulus measures in China, a major importer.
Copper futures expiring in May dropped by 0.3% to $3.9218 a pound, following a 0.8% rise last week. Positive import data from China also indicated stable demand in the country, despite prevailing economic challenges.
Paraphrasing text from "Investing" all rights reserved by the original author.
