Gold prices inched up during Asian trading on Wednesday following remarks from Federal Reserve Chair Jerome Powell that fueled speculation about the timing of interest rate cuts.
Meanwhile, copper prices declined, reversing a recent rebound in response to conflicting inflation signals from China, the world’s largest copper importer.
Gold had shown strength in recent sessions as the dollar weakened amid growing expectations of a rate cut in September. However, gains were tempered as Powell’s comments provided no clear indication on the future path of interest rates.
Spot gold edged up by 0.2% to $2,367.73 per ounce, while August gold futures rose 0.3% to $2,373.90 per ounce as of 00:20 ET (04:20 GMT).
The yellow metal’s rally paused following Powell’s testimony and ahead of upcoming consumer price index (CPI) data scheduled for Thursday. Analysts anticipate a modest easing in inflation figures for June.
Powell reaffirmed the Federal Reserve’s commitment to its 2% inflation target but refrained from signaling a specific timeline for rate cuts, prompting caution among traders despite prevailing expectations of a rate reduction in September.
Elsewhere, the dollar strengthened post-Powell’s testimony, with the Fed Chair set to appear before the House later in the day.
Gold’s trajectory this year hinges significantly on interest rate movements, particularly after higher rates weighed on precious metals markets over the past two years.
Among other precious metals, platinum futures declined by 0.3% to $997.05 per ounce, while silver futures slipped 0.1% to $31.025 per ounce.
Silver has outperformed gold recently, benefiting from its industrial applications.
In contrast, copper prices faced pressure on Wednesday. Benchmark copper futures on the London Metal Exchange dropped 0.3% to $9,844.50 per tonne, while one-month copper futures fell 0.4% to $4.5652 per pound.
Sentiment towards copper was affected by conflicting inflation reports from China, where CPI inflation decreased in June amidst ongoing economic challenges. Although producer price index inflation slowed to its least rapid pace in 16 months, deflationary pressures persisted in China’s economy.
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