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Gold prices rangebound amid rate cut speculation, copper near 1-mth low

Published 05-06-2024, 10:30 am
© Reuters.
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Investing.com-- Gold prices rose in Asian trade on Wednesday, but stuck to a range seen for nearly two weeks amid continued speculation over when the Federal Reserve will begin cutting interest rates.

Among industrial metals, copper prices hit a near one-month low, wiping out most of a run to record highs through May, amid growing concerns over slowing global economic growth.

Gold saw some respite as the dollar sank to two-month lows this week. But the greenback staged a mild recovery on Wednesday.

Spot gold rose 0.4% to $2,337.35 an ounce, while gold futures expiring in August rose 0.4% to $2,357.05 an ounce by 00:46 ET (04:46 GMT). But spot gold remained squarely within a $2,300 to $2,350 an ounce range seen for nearly two weeks, a range it entered after tumbling from record highs hit in May. 

Gold rangebound amid rate cut speculation

Traders remained wary of betting big on the yellow metal, even as a batch of weak U.S. economic data fueled increased speculation that the Fed will begin cutting rates in September. 

Weak job openings data on Tuesday added to this notion, coming just days after weak purchasing managers index data and a downgraded gross domestic product reading. 

The CME Fedwatch tool showed traders steadily increasing their bets on a September rate cut.

But markets were still cautious, with nonfarm payrolls data due on Friday set to provide more definitive cues on the labor market. 

The Fed is also set to meet next week, and is widely expected to keep rates steady amid sticky U.S. inflation. 

Other precious metals were also volatile on Wednesday. Platinum futures fell 0.2% to $995.50 an ounce, while silver futures rose 0.8% to $29.863 an ounce, after both metals clocked steep losses on Tuesday.

Copper near 1-mth low as economic outlook sours 

Benchmark copper futures on the London Metal Exchange rose slightly to $9,975.50 a tonne, while one-month copper futures rose to $4.5497 a pound.

Both contracts were close to their weakest levels in a month, after largely wiping out all of their gains in May, when they had briefly hit record highs.

Sentiment towards copper soured as middling economic readings from the U.S. and China raised concerns over slowing global growth, which bodes poorly for copper demand.

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