Gold Prices Rise in Asian Trade, Still Rangebound on Rate Woes
Gold prices in Asian trade on Monday extended a rebound from one-month lows, rising after recently breaking below a key support level. However, fears of higher-for-longer U.S. rates kept prices largely rangebound.
The yellow metal briefly broke below $2,000 an ounce earlier in February due to stronger-than-expected U.S. inflation readings, which led traders to largely price out the prospect of early interest rate cuts by the Federal Reserve.
Despite rebounding back above the support level over the past two sessions, gold remained largely within a $2,000-$2,050 an ounce trading range established since mid-January. The yellow metal has struggled to make headway in the face of sticky U.S. inflation and a hawkish outlook for interest rates.
Rising 0.3% to $2,019.95 an ounce, gold prices expiring in April also rose 0.4% to $2,031.15 an ounce by 00:37 ET (05:37 GMT).
Strength in the U.S. dollar weighed on gold, as the greenback remained in sight of a three-month high after stronger-than-expected inflation data on Friday.
The reading came just days after a stronger-than-expected inflation reading for January. Sticky inflation gives the Fed less impetus to begin immediately loosening monetary policy, with a swathe of Fed officials having warned as much in recent weeks.
Focus is now on the Federal Reserve for more cues on interest rates, with the Fed having largely downplayed all bets on early rate cuts during the meeting.
Higher-for-longer rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.
This notion weighed on other precious metals, with silver falling 0.3% and platinum falling 1.3%.
Copper prices slip, China cues in focus
Among industrial metals, copper prices fell on Monday, but were sitting on strong gains from the prior week on hopes of improving economic conditions in China.
Expiring in March, copper prices fell 0.4% to $3.8083 a pound after surging over 4% in the prior week.
Data showing increased consumer spending in China over the Lunar New Year holiday ramped up hopes for a broader economic recovery in the world’s largest copper importer.
