Gold prices nudged higher in early Asian trading on Wednesday, recovering from previous losses after stronger-than-anticipated U.S. consumer inflation figures bolstered the dollar. The data reduced expectations for near-term interest rate cuts, putting some pressure on the precious metal.
Other metals also saw a rebound after recent declines. Platinum and silver, which had surged past gold in recent weeks, pulled back slightly as traders locked in profits following their recent rallies.
Despite this, gold’s appeal as a safe haven remained supported by ongoing concerns over U.S. trade tariffs imposed by President Donald Trump. Uncertainty around the Federal Reserve’s autonomy also played a role, with mounting pressure from Trump and his supporters calling for Fed Chair Jerome Powell’s removal. Additionally, geopolitical tensions involving Russia and Ukraine continued to sustain demand for the metal.
Spot gold gained 0.4% to trade at $3,339.26 per ounce, while September gold futures were up 0.3% at $3,345.40 per ounce by early Wednesday morning ET.
Gold Holds Within Established Range, While Other Precious Metals Show Strength
Although gold saw modest gains this week, it remained confined within a well-established range between $3,300 and $3,500 per ounce—levels consistent over the last three months. The metal faced resistance as investors weighed whether gold’s record highs from April had left it overbought, especially compared to the stronger performances of other precious metals.
Platinum and silver had outpaced gold recently, reaching decade-high prices. Their rise was fueled by investors seeking better value alternatives to gold, alongside expectations of improved demand and tighter supply conditions.
However, this week both platinum and silver retreated amid declining expectations of imminent Fed rate cuts. Spot platinum stabilized at $1,421.00 per ounce, while silver edged up slightly to $37.84 per ounce.
Dollar Gains Pressure Metal Prices Amid Persistent Inflation Concerns
Broader metal prices remained under pressure as the U.S. dollar climbed to a three-week peak on Tuesday, driven by inflation data that showed consumer prices rising more than expected in June.
Among industrial metals, London Metal Exchange copper futures held steady at $9,639.70 per ton, while U.S. copper futures dipped 0.4% to $5.50 per pound.
Although June’s Consumer Price Index showed only a slight increase over May, the continued rise raised concerns about persistent inflation. The data also underscored worries about the inflationary impact of the tariffs imposed by President Trump.
The Federal Reserve has signaled it will maintain current interest rates until it better understands the effects of these tariffs, a stance reinforced by the latest inflation figures. Meanwhile, this position has drawn criticism from Trump and his allies, who are increasing calls for Powell’s exit and for interest rate cuts.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply