Investing.com-- Gold prices fell slightly in Asian trade on Wednesday as hawkish-leaning comments from top Federal Reserve officials buoyed the dollar and Treasury yields, which pressured the yellow metal.
But bullion prices still remained in sight of recent peaks, as persistent concerns over a war between Iran and Israel kept safe haven demand in play.
Gold prices raced to record highs last week as Iran launched a strike against Israel, with markets now watching for a response from Jerusalem, which some reports said was imminent.
Spot gold steadied at $2,382.65 an ounce, while gold futures expiring in June fell 0.4% to $3,398.70 an ounce by 00:21 ET (04:21 GMT). Spot gold hit record highs above $2,400 an ounce on Friday.
Gold prices were pulled off record highs this week as strong U.S. inflation and retail sales data saw traders scale back bets that the Fed will cut interest rates in June.
This notion was furthered by Fed Chair Jerome Powell on Tuesday, who said that the central bank had little confidence in cutting interest rates due to sticky inflation.
Powell’s comments further boosted the dollar and Treasury yields. The greenback rose to over five-month highs, pressuring broader commodity markets.
Traders were now pricing in a nearly 80% chance the Fed will keep rates steady in June- a stark reversal from earlier bets for a 25 basis point cut, according to the CME Fedwatch tool.
The prospect of higher-for-longer interest rates bodes poorly for gold, given that the yellow metal offers no direct yield. This notion may limit further gains in gold, especially with the yellow metal already sitting well within overbought territory.
Other precious metals also retreated on Wednesday. Platinum futures fell 0.6% to $965.10 an ounce, while silver futures fell 0.5% to $28.223 an ounce.
Industrial metal prices tread water on Wednesday after clocking a stellar rally in recent sessions, as new sanctions on Russian metal exports pointed to tighter markets. But persistent strength in the dollar spurred some pullback in prices, as did the prospect of higher-for-longer rates, which could potentially stymie demand.
Three-month copper futures on the London Metal Exchange steadied at $9,465.50 a ton, while one-month copper futures rose 0.1% to $4.2995 a pound.
Aluminum futures steadied around $2,559.0 a ton.
New sanctions on Russian metal exports saw metal prices surge to 15-month highs last week. Some positive economic data from China also aided sentiment.
Begin trading today! Create an account by completing our form
At One Financial Markets we are committed to safeguarding your privacy.
Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.
Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.
Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.
By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.