©Reuters
Investing.com — Gold prices stabilized in Asian trading on Wednesday, but remained wary of a fall from record highs as strong U.S. inflation readings continued to raise concerns that interest rates could remain high for an extended period of time.
The yellow metal has seen some profit-taking after surging to $2,200 earlier this week. Gold's initial rebound was driven by bets on an early interest rate cut by the Federal Reserve, but Tuesday's data quickly cooled those bets.
It was stable at $2,159.32 an ounce, but fell 0.1% to $2,164.45 an ounce by 00:13 GMT by the April deadline. Both stocks are down about 2% each from their record highs reached earlier this week.
On Monday, spot gold hit an all-time high of $2,195.20 per ounce and gold futures hit a new high of $2,203.0 per ounce.
CPI statistics focus on interest rate cuts, further economic indicators awaited
U.S. inflation in February was slightly higher than expected and remained well above the Fed's annual target of 2%, according to CPI statistics.
Traders still believe there is a 70% chance of a 25 basis point rate cut in June, according to the tool, but momentum for the Fed to begin cutting rates sooner has weakened. It has been suggested that.
CPI data now focuses directly on future projections and measurements towards further cuts in the US economy. Further signs of economic resilience would give the Fed more room to keep interest rates high for an extended period of time.
Such a scenario bodes badly for gold, and a strong US economy is also likely to take away demand for the safe-haven yellow metal. However, the yellow metal will continue to rise significantly even into 2024.
Gold and other precious metals were also weighed down by a rise in U.S. Treasury yields overnight.
It had been hovering around $927.90 per ounce, but fell 0.4% to $24.297 per ounce.
Copper prices slow, China's cheers fade
Among industrial metals, those expiring in May fell 0.2% to 3.9283 pounds per pound.
The red metal has shown some strength in recent trading on expectations that China, its biggest importer, will roll out more stimulus this year to help the economy recover.
However, China's economic outlook remained subdued, especially after the Chinese government set its 2024 GDP target at a much lower 5%, the same level as 2023.