Investing.com — Gold prices edged below record highs in Asian trade on Wednesday as safe-haven demand for the yellow metal increased in anticipation of key U.S. inflation data and further clues on interest rates. It remained at the same level.
Among industrial metals, copper prices rose to a 15-month high amid hopes that demand will recover as factory activity picks up around the world. Expectations remain that copper supplies will tighten.
Gold rose primarily due to increased demand for safe-haven assets, but reports of central bank purchases, particularly in China, also spurred increased demand for the yellow metal. This helped gold rise despite persistent concerns about US interest rates remaining high for an extended period of time.
It rose 0.3% to $2,359.28 an ounce by 1:34 a.m. ET (5:34 p.m. ET) and hit a record high of $2,377.45 an ounce, up 0.6% by June deadline. did. The spot price hit a record high of $2,365.34 per ounce in early trading.
Gold gains limited as US CPI data awaits further interest rate clues
The yellow metal's strong gains were mainly held back by expectations for key US statistics to be released later on Wednesday.
The data is expected to show that inflation remains sticky in March, a trend that weakens the Fed's push to begin cutting rates.
The CPI data also comes on the heels of an impressive report, as well as a slew of warnings from Fed officials that strong inflation will delay any potential interest rate cuts by the central bank. These are also scheduled for later Wednesday.
The prospect of higher interest rates for an extended period bodes poorly for gold, but increased central bank purchases, particularly in Asia and emerging markets, supported the yellow metal. Demand for gold has increased as fears of a significant economic slowdown in the second half of the year have grown.
The People's Bank of China has been buying gold for 17 consecutive months, according to data released earlier this week, and the pace of its purchases shows little sign of slowing. The People's Bank of China, in particular, is heavily hedging against an economic slowdown and further declines in China's stock market.
Other precious metals also rose, but with mixed results. It hit a three-month high of $992.90 an ounce, and rose 1.3% to $28.363 an ounce, a nearly three-year high.
Copper at 15-month peak, awaiting further clues from China
On the London Metal Exchange, it rose 0.4% to $9,468.0 a tonne and rose 0.2% to $4.3110 a pound.
Both contracts were at 15-month highs as the market bet on an improving outlook for copper demand amid growing confidence that the global manufacturing slump has bottomed out.
China's copper supplies are also expected to tighten, with several major refineries warning of production cuts in the coming months.
Further economic data from China, the world's largest copper importer, is also expected to be released later this week. Deadlines are Thursday and Friday respectively.