Gold prices steady below $2,400; Rate fears, dollar pressure persist
Gold prices rebounded from overnight losses in Asian trading on Thursday but stayed below recent highs due to concerns about higher interest rates persisting and pressure from a robust dollar.
Gold had reached record levels last week amid increased safe-haven demand following Iran’s strike on Israel. However, concerns about an escalated conflict eased this week as Israel refrained from immediate retaliation.
The dollar’s pressure eased somewhat this week after it pulled back from over five-month highs on Wednesday. However, despite this reprieve, gold failed to capitalize due to expectations of sustained higher interest rates.
Spot gold rebounded by 0.6% to reach $2,374.31 per ounce, while gold futures expiring in June saw a slight increase to $2,389.05 per ounce by 00:21 ET (04:21 GMT). This recovery followed a 0.9% decline in spot prices on Wednesday, as profit-taking ensued after gold surged to record highs of over $2,340 an ounce last week.
Gold experienced profit-taking on Wednesday, but remains close to exiting overbought territory
Gold witnessed significant profit-taking this week following its record highs, particularly as the Iran-Israel conflict did not immediately escalate, prompting a return of some risk appetite to the markets.
Spot prices remained in overbought territory, as indicated by their 14-day relative strength index. However, the indicator was nearing neutral territory below 70 points. This situation could potentially set the stage for further near-term gains in gold.
Further gains in gold are uncertain amid expectations of higher-for-longer U.S. interest rates. Strong inflation data and hawkish signals from the Federal Reserve have led traders to largely discount the possibility of a rate cut in June.
Platinum futures slipped 0.3% to $949.60 an ounce, while silver futures edged up 0.2% to $28.465 an ounce on Thursday, with other precious metals showing mixed performance amid recent weakness.
Copper and aluminum prices rose on Thursday as the dollar weakened
Industrial metal prices surged on Thursday, supported by a weaker dollar and optimism regarding U.S. economic strength bolstering metal demand.
Three-month copper futures on the London Metal Exchange edged up 0.4% to $9,591 per ton, nearing a two-year high. Similarly, one-month copper futures climbed 0.5% to $4.3623 per pound, also hovering near a two-year high.
Aluminum futures increased by 0.6% to $2,589.0 per ton.
Industrial metal prices surged recently due to expectations of tighter supplies following stricter sanctions imposed by the U.S. and its allies on Russian metal exports.
Copper prices were further boosted by several major Chinese smelters signaling their intent to reduce production.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.87% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
