Gold prices inched steadily closer to record highs in Asian trading on Wednesday, buoyed by a surge in safe-haven demand for the precious metal ahead of the release of significant U.S. inflation data and further signals on interest rate movements.
Concurrently, copper prices soared to their highest levels in 15 months, propelled by growing optimism surrounding a potential rebound in global factory activity. This upward trajectory in copper prices was further fueled by expectations of a tightening in copper supplies.
The upswing in gold values was predominantly propelled by an escalation in safe-haven demand, with reports of central bank purchases, particularly in China, amplifying the appetite for the yellow metal. Despite lingering concerns over the potential impact of higher U.S. interest rates, gold managed to sustain its upward momentum.
Spot gold experienced a modest uptick of 0.3%, reaching $2,359.28 per ounce, while gold futures expiring in June surged by 0.6% to hit a record high of $2,377.45 per ounce by 01:34 ET (05:34 GMT). Earlier in the session, spot prices peaked at a record high of $2,365.34 per ounce.
However, the significant gains in gold were somewhat tempered by the anticipation of crucial U.S. consumer price index (CPI) data scheduled for release later in the day. Market analysts anticipate that the CPI data will reveal persistent inflationary pressures in March, potentially reducing the likelihood of the Federal Reserve initiating interest rate cuts.
The gold market also awaits the release of the minutes from the Fed’s March meeting, as well as ongoing central bank buying, particularly in Asia and emerging markets. Central banks, including the People’s Bank of China, have been actively purchasing gold amid concerns of a potential economic slowdown later in the year.
In the realm of precious metals, platinum futures saw modest gains, reaching over three-month highs of $992.90 per ounce, while silver futures surged by 1.3% to near three-year highs of $28.363 per ounce.
Meanwhile, in the base metals segment, copper prices continued their ascent, with three-month copper futures on the London Metal Exchange rising by 0.4% to $9,468.0 per ton, and one-month U.S. copper futures increasing by 0.2% to $4.3110 per pound. Both contracts reached 15-month highs, driven by optimism about improved copper demand and expectations of tighter supply conditions, particularly in China, the world’s largest copper importer.
Investors are also eagerly awaiting key economic indicators from China, including inflation and trade data, scheduled for release later in the week, which could provide further insights into the demand outlook for copper and the broader metals market.
