Gold Prices Steady as Dollar Eases Ahead of CPI Test; Copper Remains Strong

Gold prices remained stable during Asian trading on Wednesday, benefiting from a weaker dollar as markets prepared for important U.S. consumer inflation data that is expected to influence the interest rate outlook.

In the realm of industrial metals, copper prices climbed to their highest levels in over two years. This increase was driven by expectations of tighter supplies and potential fiscal stimulus in China, which helped to balance out worries about sluggish demand.

Gold prices experienced gains after Federal Reserve Chair Jerome Powell indicated that U.S. interest rates were unlikely to increase further. His remarks also contributed to a decline in the dollar.

Gold was reported at $2,357.65 per ounce, while the June futures contract increased by 0.1% to $2,361.90 per ounce.

### Anticipation Builds for CPI Data Amid PPI Surprises

Market attention is now firmly focused on April’s consumer price index (CPI) data, especially following better-than-expected producer price index (PPI) figures released recently.

The stronger PPI numbers heightened concerns that persistent inflation could hinder any potential interest rate cuts this year. A high CPI reading could amplify these worries.

While Powell’s comments regarding the tightness of monetary policy alleviated some market concerns about rising rates, he still emphasized the need for greater confidence that inflation is moving toward the central bank’s 2% annual target.

Continued high rates suggest that the Federal Reserve may maintain elevated interest rates for a prolonged period, which could negatively impact metal prices due to the increased opportunity cost associated with investing in precious metals.

Other precious metals also rose on Wednesday, leveraging the softer dollar. Silver edged up to $1,065.85 per ounce, while platinum increased by 0.2% to $28.767 per ounce.

### Copper Prices Steady at Two-Year Highs, China Data in Focus

Copper prices on the London Metal Exchange climbed by 0.6% to $10,145.00 per ton, while aluminum steadied at $5.0137 per pound. Both commodities reached their highest values since April 2022 following China’s announcement of a significant 1 trillion yuan ($138 billion) bond issuance aimed at bolstering economic growth.

Copper’s recent rally over the past two months has been supported by the likelihood of tighter supplies due to sanctions on Russian metals and cuts in Chinese refineries.

Looking ahead, market participants are keenly awaiting additional data from China, including key economic readings set to be released on Friday.