Gold prices in sight of record highs; copper rebounds on China cues

Investing.com-- Gold prices steadied in Asian trade on Thursday, sitting near record high as traders bought into the yellow metal ahead of more cues on U.S. inflation and interest rates.

Among industrial metals, copper prices rebounded from recent losses, moving back towards 11-month peaks after reports showed that Chinese copper smelters were proposing output cuts.

Bullion prices recovered a bulk of their losses this week as expectations that the Federal Reserve could cut interest rates by as soon as June remained in play. But strength in the dollar, which sat near a one-month high, kept gold prices just off record highs.

Spot gold steadied at $2,195.34 an ounce, while gold futures expiring in April steadied at $2,215.80 an ounce by 01:09 ET (05:09 GMT). Spot prices were just below a record high of $2,222.90 an ounce hit last week.

Gold prices steady with PCE data, Fed speakers in focus 

Focus was now squarely on PCE price index data- the Fed’s preferred inflation gauge- which is due on Friday. Any signs of cooling inflation are likely to trigger strong gains in metal markets, given that they increase the chances of early interest rate cuts. 

Along with the PCE data, separate addresses from Fed Chair Jerome Powell and FOMC member Mary Daly are also due on Friday. Any signals from the two on interest rate cuts will be closely watched, after other Fed officials struck a somewhat hawkish tone this week.

Governor Christopher Waller warned that the central bank was in no hurry to begin cutting rates, citing sticky inflation and resilience in the U.S. economy.

Higher-for-longer rates bode poorly for gold prices, given that they increase the opportunity cost of investing in bullion.

This notion kept other precious metals also under pressure. Platinum futures rose 0.3% to $914.0 an ounce, while silver futures steadied at $24.777 an ounce. 

Copper prices rebound on Chinese supply cut hopes 

Three-month copper futures on the London Metal Exchange rose 0.5% to $8,913.0 a ton, while one-month U.S. copper futures rose 0.4% to $4.0303 a pound. 

Reuters reported that major Chinese copper smelters were considering output cuts, and had also set no guidance for copper prices in the second quarter. 

Reports of Chinese production cuts, which herald tighter markets for refined copper, had triggered sharp gains in copper prices earlier in March, putting them at 11-month highs.

But these gains were offset by data showing Chinese copper inventories remained robust, which in turn suggested that markets may not be as tight as initially expected.