Gold prices showed minimal movement in Asian trading, reclaiming the $2,000 level after weak U.S. retail sales data raised uncertainties about the Federal Reserve’s timeline for interest rate cuts. Bullion prices climbed back above $2,000 an ounce, partly influenced by safe-haven demand following reports of recessions in Japan and the UK.
Despite this rebound, gold remained on track for significant weekly losses, reflecting traders’ diminished expectations for early rate cuts. The precious metal steadied at $2,003.86 per ounce in the spot market, while April gold futures steadied at $2,015.55 per ounce. Both indicators were poised for a 1.1% weekly decline, marking the worst performance since early December.
Fed officials, including Atlanta Fed President Raphael Bostic, cautioned against premature bets on rate cuts. Bostic emphasized that although progress had been made in curbing inflation, he was not yet ready to advocate for rate cuts. His remarks came ahead of the release of producer price index inflation data later on Friday. San Francisco Fed President Mary Daly is also scheduled to speak.
Gold prices face headwinds as Fed officials emphasize a cautious approach to interest rates due to a robust U.S. economy, persistent inflation, and a strong labor market. Elevated interest rates tend to increase the opportunity cost of holding gold.
In contrast to gold, other precious metals exhibited varied movements, with silver futures for March gaining 0.3%, set to finish the week with a 1.9% gain. Platinum futures for April slipped 0.4% but were on track for a 2.7% weekly increase.
In the realm of industrial metals, copper prices saw an uptick, extending gains amid a weaker dollar. April copper futures rose 0.4% to $3.7728 per pound, heading for a 2.5% weekly gain. However, concerns about deteriorating global economic conditions continued to weigh on copper prices, impacting demand for the red metal.
