Gold Prices Steady After Record Highs

Gold prices steadied in Asian trade on Wednesday after hitting record highs this week due to lower U.S. interest rates impacting the dollar and increasing investments in gold.

Broader metal prices also saw gains, benefitting from a weaker dollar and declining Treasury yields, although the pace slowed as the market moved towards a risk-off approach.

• Spot gold rose 0.1% to $2,515.44 an ounce.
• Gold futures for December increased by 0.1% to $2,553.35 an ounce at 00:51 ET (04:51 GMT). Spot prices reached a record high of $2,531.72 on Tuesday.

Gold Supported by Rate Cut Bets; Fed Minutes in Focus

Gold prices were mainly supported by persistent expectations that the Federal Reserve will start cutting interest rates in September. Traders are divided over whether the reduction will be by 25 or 50 basis points, according to CME Fedwatch data.

This week’s focus is on Fed Chair Jerome Powell’s address at the Jackson Hole Symposium on Friday, where he is anticipated to further the Fed’s dovish stance. Analysts, however, do not expect Powell to forecast potential rate cuts explicitly.

The minutes from the Fed’s late-July meeting are also expected later in the day, following a dovish sentiment expressed during that meeting. Lower interest rates generally favor gold because they diminish the opportunity cost of investing in non-yielding assets.

The recent dollar weakness significantly contributed to the increases in metal markets. The majority of buying activity was directed toward gold, with other precious metals showing only minor gains.

• Platinum futures declined 0.1% to $956.25 an ounce.
• Silver futures increased by 0.1% to $29.538 an ounce.

Copper Steadies Amid Improved Demand in China

Among industrial metals, copper prices experienced a slight rise on Wednesday, continuing a rebound from recent lows due to improved demand from China, the top importer.

• Benchmark copper futures on the London Metal Exchange increased by 0.4% to $9,222.50 a ton.
• One-month copper futures rose 0.2% to $2,554.10 a pound.

Recent data indicated a decline in China’s copper exports in July, as domestic buyers capitalized on recent price weaknesses. While there were signs of improved demand, the persistent economic weaknesses in China slowed the overall gains in copper as the country continues to struggle with a post-COVID recovery for nearly two years.