Gold Prices Decline from Record Highs Amid Ongoing Rate Concerns; Copper Tumbles

Gold prices experienced a decline during Asian trading on Tuesday, pulling back from recent record highs as reduced uncertainty surrounding Iran diminished safe haven demand for the precious metal. Additionally, ongoing concerns about U.S. interest rates continued to exert pressure on gold’s value.

In the industrial metals sector, copper, which had reached record highs, also saw a reversal on Tuesday due to profit-taking as traders assessed the metal’s potential for the remainder of the year.

Gold had surged to a new peak on Monday amid heightened safe haven demand, driven by fears of geopolitical instability following the death of Iran’s President in a helicopter crash. However, the immediate implications of his demise remained uncertain.

Gold prices fell by 0.5% to $2,413.77 an ounce, while June contracts dipped 0.9% to $2,416.75 an ounce. Spot gold had hit nearly $2,450 on Monday.

### Gold Softens as Safe Haven Demand Decreases, Rate Concerns Linger

The decline in safe haven demand for gold was attributed to the absence of significant instability in the Middle East, leaving gold vulnerable to pressures from U.S. interest rates.

Several officials from the Federal Reserve expressed on Monday that more evidence would be required to confirm that inflation was easing before the central bank could consider lowering interest rates. Consequently, it is expected that rates will remain elevated for an extended period.

As markets prepared for the upcoming outcome of the Fed’s late-April meeting, scheduled for Wednesday, broader metal prices faced downward pressure, interrupting recent rallies. Persistently high interest rates increase the opportunity cost of holding non-yielding assets like gold.

Other precious metals also fell on Tuesday, with platinum dropping 1.6% to $1,042.60 an ounce and palladium decreasing 2.5% to $31.628 an ounce. However, both metals retained a significant portion of their prior gains.

### Copper Retreats from Record Highs

Copper prices saw a sharp decline from the record highs reached on Monday, as investors reassessed the metal’s potential for the year.

The recent surge in copper prices was primarily fueled by speculation regarding a potential supply shortage, which led to a short squeeze on the Comex exchange and further price increases.

However, these gains appeared to cool on Tuesday, as traders focused on the ability to source copper shipments in time to satisfy immediate demand.

On the London Metal Exchange, copper fell 1.3% to $10,825.00 per ton after peaking above $11,100 on Monday. Additionally, the price of copper in pounds decreased 1.1% to $5.0510, also pulling back from record levels.