Gold Nears Record Highs Ahead of US Inflation, Rate Cut Cues

Gold prices traded steadily on Thursday, closing in on record highs as traders opted for the precious yellow metal ahead of further signals about US inflation and interest rates.

Spot gold stabilized at $2,195.34 per ounce, trading near the record peak of $2,222.90 per ounce reached the week ago. April contract gold futures were stable at $2,215.80 per ounce.

The safe-haven metal has largely bounced back this week on ongoing views of a June rate cut by the Federal Reserve. However, bullion prices stayed below record highs due to a strong US dollar, which was trading close to its one-month high.

In industrial metals, copper prices recovered to approach 11-month peaks after China’s major copper smelters reportedly suggested trimming output by 5% to 10% and decided not to provide guidance for copper prices in the second quarter.

Still, the increases were curbed by Chinese copper supplies remaining strong, indicating less tight conditions for markets than initially expected.

Gold Awaits Cues from PCE Data, Fed Speeches

Traders now await the release of the US personal consumption expenditures (PCE) data, the Fed’s chosen inflation measure, on Friday.

Any indications that inflation is easing are expected to drive metal markets up, considering they reinforce the likelihood of the central bank starting early to lower interest rates.

Fed Chair Jerome Powell and San Francisco Fed President and Chief Executive Mary Daly are also set to speak on Friday. Traders will be keeping a close eye on for cues from their separate remarks after other Fed policymakers have expressed a hawkish view this week.

Fed Governor Christoper Waller stated that the central bank was not rushing to cut interest rates as inflation remained resilient and the world’s largest economy showed strength.

The prospect of keeping interest rates higher for an extended period has offset gains in gold prices and other precious metals. Platinum futures expiring in July gained 0.02% to $923.00 per ounce, and silver futures for May rose 0.01% to $25.100 per ounce.