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Investing.com — Gold prices remained in a narrow range on Tuesday, under pressure from the dollar as investors braced for inflation data that is widely expected to be factored into the Federal Reserve's interest rate plans. It has changed.
The yellow metal has returned to a trading range of $2,000 to $2,050 an ounce over the past week as traders began to chip away at hopes of an early rate cut from the Federal Reserve.
A number of Fed speakers also warned last week that the Fed is in no hurry to cut rates early amid concerns that inflation will remain high. As a result, the gold price rose to a three-month high, weighing on gold.
In Asian trade, the US dollar rose slightly.
The April expiration was flat at $2,033.45 an ounce by 12:33 a.m. ET (5:33 p.m. Japan time), but steady at $2,020.06 an ounce.
CPI data waits for clues about further Fed rate cuts
Statistics released later on Tuesday are expected to show that (CPI) inflation eased in January. But that number is expected to remain well above the Fed's annual target of 2%, so there is little reason for the Fed to start cutting rates any time soon.
This scenario bodes poorly for gold, given that rising interest rates will drive up the opportunity cost of buying non-yielding bullion.
According to the paper, the market has been steadily pricing in expectations for interest rate cuts in March and May, and the probability of a 25 basis point cut in June is currently only 45%. Gold prices were falling as hopes for an early interest rate cut faded.
Spot prices are currently trading just $20 above the closely watched support level of $2,000 an ounce, and analysts believe this level could be tested in the near term, especially in the wake of rising inflation. It is said that there is a sex.
Copper prices rebound, further economic indicators awaited
Among industrial metals, copper prices surged from three-month lows last week after hopes of increased supply following the discovery of large copper deposits in Zambia led to heavy losses.
The March deadline rose 0.8% to $3.7485 per pound.
However, it will take years for the Zambia deposit to develop into a fully operational mine. This indicates that increased copper supply will not materialize in the short term.
On the demand side, this week focused attention on further statistics from major countries for clearer clues on copper demand. Fourth quarter GDP data was released from and is expected to be released later this week.
