Wednesday's Asian trading saw little movement in gold
prices, which were impacted by the dollar's recovery as investors continued to
worry about the possibility of less aggressive monetary easing in 2025.
Expectations of slower rate decreases were reinforced by
strong U.S. data that was released overnight, particularly in light of mounting
evidence that the labor market was still strong. Tuesday saw a strong increase
in Treasury yields as the currency recovered from one-week lows.
Despite growing concerns about a worldwide trade war sparked
by the U.S.-China rhetoric, gold saw little demand as a safe haven,
particularly as incoming President Donald Trump prepares further trade
sanctions on China.
Gold futures expiring in February dropped 0.1% to $2,662.24 an ounce by 00:27,
while spot gold remained unchanged at $2,649.47 an ounce.
Gold prices pressured by US rate jitters
Following an overnight surge, the dollar steadied on
Wednesday as data on job vacancies showed that the labor market was still
strong.
The estimate comes just a few days before this week's
important nonfarm payroll report for
December, which should provide more conclusive indicators of
the labor market.
Concerns about sticky inflation were also sparked by
December's strong purchasing managers index data.
The Federal Reserve cautioned at its December meeting that it would have less
incentive to lower interest rates because to sticky inflation and labor market
resilience.
This idea was reaffirmed earlier in the week by hawkish
remarks made by Fed officials.
Since longer rates raise the opportunity cost of investing, they are bad for
the gold and metal markets.
Other precious metals were mildly weaker on Wednesday. Platinum
futures fell 0.2% to $973.60 an ounce, while silver futures fell
0.1% to $30.663 an ounce.
Copper price advance with China inflation in focus
Copper prices increased somewhat among industrial metals as
attention shifted to additional economic signals from China, the world's
largest importer, which are anticipated later this week.
March copper futures increased 0.3% to $4.1905 a pound,
while benchmark copper futures on the London Metal Exchange increased 0.1% to
$8,992.0 a ton.
China's December inflation data will be released on
Thursday, providing additional economic indicators as Beijing tries to support
development.
In order to boost the economy, the government is anticipated to increase fiscal
spending this year, particularly in light of trade-related challenges from the
Trump administration.
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