Investing.com — Gold prices moved little on Wednesday, hovering near three-month lows as anticipation of an address by Federal Reserve Chair Jerome Powell, as well as a reading on the central bank’s preferred inflation gauge kept traders on edge.
Copper prices, meanwhile, fell further as data from China pointed to worsening economic conditions in the world’s largest copper importer.
was flat at $1,915.24 an ounce, while steadied at $1,924.10 an ounce by 00:56 ET (04:56 GMT).
Gold appeal limited as risk appetite improves ahead of Powell speech
Bullion’s appeal as a safe haven asset was also dented amid some improvement in risk appetite, following positive economic indicators from the U.S., which showed some resilience in capital goods and the housing market.
This weighed on the yellow metal ahead of an at a European Central Bank forum later on Wednesday, with the Fed chair widely expected to offer more cues on monetary policy.
Powell had largely stuck to his hawkish stance during a two-day testimony before Congress last week, flagging at least two more interest rate hikes this year to curb high inflation.
More cues on U.S. inflation are also due this week, with the for May due on Friday. The index is the Fed’s preferred inflation gauge, and is expected to remain steady after unexpectedly rising in April.
A hawkish outlook on the Fed bodes poorly for gold, given that it pushes up the opportunity cost of holding the yellow metal. This notion has weighed heavily on gold so far in 2023, with the dollar having largely outperformed the yellow metal.
Markets are pricing in an that the Fed will raise rates by 25 basis points in July, and another hike of the same magnitude later in the year.
Other precious metals were also nursing steep losses, with down 0.7%, while hovered near a one-month low.
Copper slips on weak Chinese data
Among industrial metals, copper prices fell further on Wednesday as data showed that in the world’s largest copper importer fell further through May.
fell 0.4% to $3.7767 a pound.
The weak industrial profits data points to more headwinds for China’s manufacturing sector, which is a key driver of copper demand.
Focus this week is also on data from China, which is set to shed more light on slowing business activity in the country.
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