Gold prices rangebound as dollar reigns before more rate cues

Investing.com-- Gold prices kept to a tight range in Asian trade on Wednesday, as an overnight rebound was largely stalled by strength in the dollar before more key signals on inflation and interest rates. 

The yellow metal tumbled from record highs over the past two weeks as dovish signals from other major central banks kept traders largely biased towards the dollar. The dollar index rose slightly in Asian trade and was in sight of a one-month high.

Spot gold steadied at $2,179.98 an ounce, while gold futures expiring in April rose marginally to $2,178.60 an ounce 00:25 ET (04:25 GMT). 

Gold pressured by strong dollar ahead of PCE data, Fed comments 

While the gold prices marked some gains in overnight trade, any more upward momentum was dulled by persistent strength in the dollar.

Traders remained largely biased towards the dollar after dovish signals from the Swiss National Bank and the Bank of England pegged the greenback as the only high-yielding, low-risk currency.

Anticipation of key PCE price index data- which is the Fed’s preferred inflation gauge- and comments from top Fed officials later this week also spurred flows into the dollar, especially as traders awaited more cues on U.S. interest rate cuts.

But the Fed is still expected to only begin trimming rates from June, with gold set to see limited upside in the interim. The yellow metal is still expected to benefit from lower interest rates towards the end of the year. 

Among other precious metals, platinum futures rose 0.1% to $918.50 an ounce, while silver futures fell 0.2% to $24.573 an ounce. 

Copper prices creep lower as China outlook remains weak 

Among industrial metals, copper prices extended a fall from 11-month highs on Wednesday, as sentiment towards top importer China remained largely weak.

Three-month copper futures on the London Metal Exchange fell 0.4% to $8,836.00 a ton, while one-month U.S. copper futures fell 0.3% to $3.9932 a pound.

Data on Wednesday showed Chinese industrial profits rose 10.2% in the first two months of 2024. But a bulk of this increase was driven by a lower base for comparison from the prior year.

Optimism over Chinese demand also soured in recent sessions as inventory data showed Chinese copper stockpiles remained strong so far in 2024. This offset hopes of a copper supply shock after several major Chinese refiners signaled plans to reduce production.