Gold Prices Retreat from Record Highs as Fed Minutes Approach; Copper Declines

Gold prices experienced a decline during Asian trading on Wednesday, retreating from previous record highs as concerns about elevated U.S. interest rates intensified ahead of anticipated statements from the Federal Reserve.

The downturn also affected industrial metals, with copper prices slipping further from their recent peaks as the speculative excitement surrounding the metal began to wane amidst uncertainties regarding physical supply and overall demand.

Additionally, a stable U.S. dollar impacted metal prices, while the demand for gold as a safe haven diminished due to a lack of significant worsening in geopolitical conditions, particularly following the recent helicopter crash that resulted in the death of the Iranian President.

Gold fell by 0.2% to $2,415.61 an ounce, while June futures saw a 0.3% drop to $2,418.75 an ounce. Despite the decline, spot prices remained close to their recent high of $2,450.06 an ounce.

### Gold Affected by Rate Concerns Ahead of Fed Minutes

The Federal Reserve’s minutes, expected later on Wednesday, were drawing attention for insights into the central bank’s future decisions.

While the Fed maintained steady rates during the last meeting, Chair Jerome Powell hinted at the possibility of rate cuts in 2024. Traders were eager to see if this view was shared among other Fed officials, especially given the persistent inflation rates.

Several Fed officials indicated this week that more assurance was needed regarding inflation reduction before the central bank could consider cutting rates. Their statements bolstered the U.S. dollar and exerted pressure on higher-risk and non-yielding assets.

High interest rates typically do not favor gold, as they raise the opportunity cost of investing in the metal. Although safe haven demand briefly lifted gold to new highs at the beginning of the week, the lack of escalation in the Middle East has left gold susceptible to rate-related pressures.

Other precious metals also saw declines on Wednesday, with one falling by 0.4% to $1,058.35 an ounce, and another dropping 0.4% to $31.95 an ounce. A speculative spike had previously pushed silver prices to 12-year highs earlier in the week, but this rally now seems to be losing momentum. Platinum prices remained close to a one-year peak.

### Copper Prices Decline as Bullish Sentiment Cools

Copper fell 0.9% to $10,730.00 per ton on Wednesday, while another contract decreased by 0.8% to $5.0595 per pound, pulling back from record highs achieved earlier in the week.

The recent surge in copper prices was primarily driven by speculation, particularly a short squeeze on the Comex exchange; however, this trend has now subsided as traders remain cautious about whether physical copper supplies will meet market demands.

Optimism regarding China’s economic performance—the largest copper importer—also began to wane, as the market waited for details on how the Chinese government would implement its recently announced stimulus measures.