Investing.com-- Gold prices kept to a tight range in Asian trade on Wednesday as further losses in the yellow metal were limited by a weaker dollar, although anticipation of more cues on interest rates kept traders wary of the yellow metal.
Bullion prices were nursing a sharp drop from recent record highs as easing tensions over a war between Iran and Israel sapped away at safe-haven demand for the yellow metal.
Spot gold rose 0.3% to $2,330.05 an ounce, while gold futures expiring in June steadied at $2,343.15 an ounce by 00:04 ET (04:04 GMT). Spot prices were now trading about $100 away from a record high hit earlier in April.
The dollar fell in overnight trade after softer-than-expected purchasing managers index data for April.
Weakness in the greenback helped stem a recent drop in gold, given that most metal prices are pegged to the dollar.
But the dollar still retained a bulk of its gains made so far in April, as markets steadily priced out expectations of early interest rate cuts by the Federal Reserve.
While safe haven demand had initially helped gold rise past these headwinds, a lack of escalation in the Middle East now left bullion vulnerable to fears of higher-for-longer rates.
High rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.
Other precious metals rose in Asian trade against a weaker dollar, but were still nursing steep losses in recent sessions. Platinum futures rose 0.4% to $924.50 an ounce, while silver futures rose 0.5% to $27.485 an ounce.
Market focus was now squarely on key upcoming U.S. economic readings, which are potentially set to offer more cues on interest rates.
First-quarter gross domestic product data is due on Thursday, while PCE price index data- the Fed’s preferred inflation gauge- is due on Friday.
Recent indicators showing sticky U.S. inflation saw markets pricing out expectations for a rate cut in June.
Among industrial metals, copper prices advanced on Wednesday, also benefiting from a softer dollar. But prices of the red metal still traded below recent two-year peaks, after top producer Chile signaled that it planned to increase output this year.
The outlook for copper demand was also dented by weak U.S. PMI data, which showed an unexpected contraction in manufacturing activity.
Three-month copper futures on the London Metal Exchange rose 0.8% to $9,817.50 a ton, while one-month copper futures rose 1.1% to $4.4710 a pound.
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.