Gold prices fall as geopolitical tensions ease; U.S. CPI looms
Investing.com-- Gold prices rose slightly in Asian trade on Wednesday, recouping some overnight losses after stronger-than-expected U.S. consumer inflation data boosted the dollar and dented bets that interest rates will fall in the near-term.
Broader metal prices also rose on Wednesday, recovering some recent losses. Platinum and silver tumbled from recent peaks this week, as their outperforming gold drew in some profit-taking.
Still, safe haven demand for gold remained relatively underpinned by persistent concerns over U.S. President Donald Trump’s trade tariffs. Growing uncertainty over the Federal Reserve’s independence, amid growing calls from Trump and his allies for Chair Jerome Powell’s ouster, also factored into haven demand, as did tensions between Russia and Ukraine.
Spot gold rose 0.4% to $3,339.26 an ounce, while gold futures for September rose 0.3% to $3,345.40/oz by 01:32 ET (05:32 GMT).
Gold remains rangebound, other precious metals outperform
Despite seeing some gains this week, gold remained squarely within a $3,300-$3,500/oz trading range seen over the past three months. The yellow metal struggled to make headway amid increased speculation that gold prices were overbought after hitting record highs in April, with the yellow metal largely lagging other precious metals in recent months.
Platinum and silver raced past gold in recent months, with both metal prices reaching over decade peaks. Gains in both metals were in part driven by traders seeking more reasonably valued alternatives to gold, while expectations of improving demand and tightening supplies also helped.
Still, both metals retreated this week amid waning bets that the Fed will cut interest rates soon. Spot platinum steadied at $1,421.0/oz, while spot silver rose marginally to $37.8385/oz.
Dollar firms on sticky CPI, pressures metal prices
Broader metal prices were also quashed by strength in the dollar, which hit a three-week high on Tuesday after consumer price index inflation data read stronger than expected.
Among industrial metals, benchmark copper futures on the London Metal Exchange were flat at $9,639.70 a ton, while U.S. copper futures fell 0.4% to $5.4962 a pound.
Headline CPI read stronger than expected for June, albeit slightly. But the print still advanced from the prior month, raising concerns that inflation was turning sticky.
The CPI print also came amid increasing concerns over the inflationary effects of Trump’s trade tariffs.
The Fed has warned that it will keep interest rates unchanged until it has more clarity on the impact of Trump’s tariffs, with Tuesday’s print likely furthering this notion.
But the Fed’s stance has drawn increased ire from Trump and his allies, who were seen ramping up their calls for Powell’s departure and for interest rates to fall.