Jun 06, 2024

On Wednesday, gold prices in Asia rose slightly, hovering within a stable range observed over the past two weeks. The market is rife with speculation about when the Federal Reserve will commence lowering interest rates.

In the industrial metals market, copper prices hit a near one-month low, erasing most of their gains in May when they reached record highs. This price decline stemmed from growing concerns about slowing global economic growth.

Gold experienced some relief as the US dollar fell to its lowest level in two months this week. However, the dollar showed signs of a mild recovery on Wednesday.

gold- 4 hour chart

GOLD – 4-Hour Chart

Spot gold increased by 0.4% to $2,337.35 per ounce, while gold futures with an August expiration date gained 0.4% to $2,357.05 per ounce by 00:46 ET (04:46 GMT). Despite these gains, spot gold remained within a narrow range of $2,300 to $2,350 per ounce, a range it has maintained for nearly two weeks after experiencing a sharp decline from record highs reached in May.

Traders hesitated to make substantial bets on gold, even as weak US economic data fueled speculation that the Fed could begin cutting interest rates in September. A disappointing job openings report on Tuesday, following weak purchasing managers index data and a downgraded gross domestic product reading, further contributed to this sentiment.

Traders were increasingly confident in a September rate cut. However, markets remained cautious, anticipating the release of nonfarm payroll data on Friday, which is expected to provide more definitive information about the labour market.

The Fed is scheduled to meet next week, and it is widely anticipated that rates will remain unchanged due to persistent US inflation.

Other precious metals also exhibited volatile price movements on Wednesday. Platinum futures fell by 0.2% to $995.50 per ounce, while silver futures gained 0.8% to $29.863 per ounce. Both metals had experienced significant losses on Tuesday.

In the industrial metals market, benchmark copper futures on the London Metal Exchange increased slightly to $9,975.50 per tonne, and one-month copper futures rose to $4.5497 per pound. Both contracts were close to their lowest levels in a month, having largely erased the gains achieved in May when they briefly reached record highs.

Bearish sentiment toward copper prevailed as moderate economic readings from the US and China raised concerns about slowing global growth, negatively impacting copper demand.

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