Gold Prices Steady Around $2,300 as Inflation Data Takes Center Stage

Gold prices experienced a slight decline during Asian trading on Friday, remaining mostly stable as traders leaned towards the dollar in anticipation of important inflation data that could influence interest rates.

The price of the yellow metal had seen a modest recovery on Thursday after dipping below the $2,300 per ounce support earlier in the week, yet it remained trapped within a narrow trading range around that level. Gold dropped 0.3% to $2,320.39 an ounce, and August futures also fell 0.3% to $2,330.85 an ounce. Spot prices for June saw a decrease as well but are poised for some gains by the end of the second quarter.

### Gold Stays Stable Ahead of Inflation Data

Gold has maintained a tight trading range throughout much of June amid uncertainty regarding the trajectory of U.S. interest rates. While some economic indicators suggested a slowdown in the U.S. economy, Federal Reserve officials cautioned that persistent inflation could hinder plans to lower interest rates.

All eyes were on the upcoming economic data, as this report is the Federal Reserve’s preferred measure of inflation and is anticipated to show rates remaining significantly above the central bank’s 2% annual target. Elevated interest rates typically have a negative impact on metal markets, as they increase the opportunity cost of investing in non-yielding assets.

Other precious metals also remained stable on Friday but were showing some gains through the second quarter. Silver climbed 0.6% to $1,010.05 an ounce, while platinum rose 0.2% to $29.328 an ounce. Although there were some initial expectations of interest rate cuts that had brought gains in the metal markets during the second quarter, traders scaled back these expectations throughout June, leading to most metals losing their quarterly gains.

### Copper Prepares for a Downturn, Eyes on China PMIs

In the realm of industrial metals, copper prices saw a slight increase on Friday but were still set to close out June on a negative note, as concerns grew over demand from China, the leading importer. The benchmark price on the London Metal Exchange rose 0.6% to $9,576.50 a tonne, and one-month copper contracts went up 0.8% to $4.3695 a pound. However, both contracts reflected a decline of 4% to 5.5% for the month of June.

The downturn in copper was primarily driven by increasing doubts regarding strong global demand, exacerbated by deteriorating economic conditions in key countries. Additionally, the potential for a trade conflict with the West raised concerns about the economic outlook for China.

Attention is now directed toward imminent economic data from China, which is expected over the weekend.