©Reuters.
Investing.com — Gold prices fell in Asian trading on Friday, retreating further from record highs hit this week as a sharp rise in the dollar following a surprise interest rate cut by the Swiss National Bank weighed on the metals market.
The yellow metal had soared to a record high of more than $2,200 an ounce after the US Federal Reserve maintained the outlook for at least three interest rate cuts in 2024. However, the yellow metal had little time to sustain these highs as the dollar rallied sharply following dovish signals from other countries. major central banks.
By 00:28 ET (04:28 GMT), the price fell 0.4% to $2,173.62 an ounce, while the price for April expiry was down nearly 0.5% to $2,174.90 an ounce.
Strong dollar puts pressure on gold as major C.banks become dovish
The pressure on gold was mainly due to the sharp rise in the dollar, which hit a three-week high above $104.
Coupled with dovish signals from the Bank of England, the dollar unexpectedly surged, retaining its status as the only major high-yield, low-risk currency.
Signs of U.S. economic resilience also focused traders' attention heavily on the dollar, following the Fed's upbeat outlook and solid data.
This idea put pressure on the metals market, as investments in precious metals such as gold do not provide direct returns.
The strong dollar is also expected to limit significant upside for gold bullion, at least until the Fed starts cutting interest rates later this year. The central bank is still set to cut interest rates by 25 basis points (bp) in June, the paper said.
The eventual rate cut is expected to benefit bullion prices later this year, with Citi analysts setting a year-end price target for the yellow metal at $2,300 an ounce.
Other precious metals also fell in Asian trade, giving up most of their post-Fed gains. It fell 0.7% to $905.10 an ounce and fell 1% to $24.758 an ounce.
Copper escapes 11-month peak as China jitters widen
Prices on the London Metal Exchange fell 1% to $8,882.0 per tonne and 1.2% to $4.0175 per pound. Both contracts are down significantly from 11-month highs reached earlier this week.
Copper prices have also been weighed down by deteriorating sentiment towards China, with the country's stock market falling sharply on Friday on concerns about slowing economic growth and possible further sanctions by the United States.
However, the outlook for the copper market remains bleak, especially after recent reports revealed that China's major copper smelters plan to curb production this year.
