Wednesday, 19 June 2024
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Commodity

Gold prices drop from historic highs to about $2,150

  • A robust U.S. inflation reading has caused gold prices in Asian trading to drop down from record highs.
  • At the beginning of this week, both instruments had dropped roughly 2% from their record highs.
  • While silver prices decreased by 0.4% to $24.297 an ounce, platinum futures remained stable at $927.90 an ounce.

Due to worries about higher-for-longer interest rates, a robust U.S. inflation reading has caused gold prices in Asian trading to drop down from record highs. Expectations of early interest rate cuts by the Federal Reserve caused the initial spike, but Tuesday’s report on the consumer price index dampened such expectations.

While gold futures expiring in April dropped 0.1% to $2,164.45 an ounce, spot gold remained stable at $2,159.32 an ounce. At the beginning of this week, both instruments had dropped roughly 2% from their record highs.

Gold Prices

U.S. inflation increased marginally faster than anticipated in February, according to CPI data, although it remained well above the Fed’s 2% annual target.

Although traders continued to have bets on a 70% possibility for a 25 basis point decrease in June, this gives the Fed less incentive to start cutting interest rates early. With more cuts to the U.S. economy imminent, the CPI data now highlights the importance of the producer price index and retail sales figures.

The strength of the dollar last night and the yields on US Treasury bonds put additional pressure on gold and other precious metals. While silver prices decreased by 0.4% to $24.297 an ounce, platinum futures remained stable at $927.90 an ounce.

Copper prices were modest, with May’s copper futures slipping 0.2% to $3.9283 per pound. On expectations that top importer China will implement additional stimulus measures to assist an economic recovery this year, the red metal witnessed modest strength in recent sessions.

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