Gold prices steady as dollar eases before CPI test; copper strong
Investing.com-- Gold prices steadied in Asian trade on Wednesday, taking advantage of a softer dollar as markets hunkered down before key U.S. consumer inflation data which is likely to factor into the outlook for interest rates.
Gold saw overnight gains after comments from Federal Reserve Chair Jerome Powell suggested that U.S. rates will not rise any further. These comments were also a key factor in theThe stronger PPI reading ramped up concerns that sticky inflation will deter any potential interest rate cuts this year. A hot CPI reading is likely to further these concerns.
Such a scenario means the Fed is likely to keep rates high for longer, which in turn bodes poorly for metal prices. High rates push up the opportunity cost of investing in precious metals.Both contracts were at their highest levels since April 2022, after top importer China said it will begin a massive, 1 trillion yuan bond issuance this week. The issuance will be directed towards shoring up economic growth.
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