Gold prices pinned near 2023 lows as Fed fears persist


By Ambar Warrick — Gold prices moved little on Thursday, hovering just above their weakest levels this year amid continued concerns over rising U.S. interest rates, with focus turning to upcoming labor data to further gauge the potential for more hikes.

The yellow metal was slammed by hawkish signals from Fed Chair Jerome Powell this week, who warned that recent signs of resilience in inflation and the jobs market were likely to push interest rates higher than market expectations.

Spot gold rose 0.1% to $1,815.64 an ounce, while gold futures were flat at $1,819.35 an ounce. Both instruments were nursing an around 2% loss so far this week, as the prospect of higher rates pushed up the opportunity cost of holding non-yielding assets.

The dollar surged to three-month highs this week, while Treasury yields also rose sharply as investors began pricing in more aggressive hikes by the Fed in the near-term.

But gold appeared to have stemmed recent losses, while the dollar also paused its ascent as the Fed’s Beige Book report showed that businesses saw a further moderation in inflation this year, as well as an improvement in activity.

Focus now turns to nonfarm payrolls data due on Friday, with any more signs of labor market strength giving the Fed more impetus to hike rates.

Other precious metals traded in a tight range on Thursday, but were still nursing sharp losses for the week. Silver futures fell 0.1% to $20.122 an ounce, while platinum futures rose 0.2% to $941.25 an ounce.

Among industrial metals, copper prices rebounded sharply in overnight trade as the Beige Book report helped brew some optimism over the U.S. economy, which has been suffering from a manufacturing downturn in recent months.

Copper futures rose slightly to $4.0320 a pound on Thursday, after rebounding 1.6% during the U.S. session.

But the red metal was still down 0.8% this week, as markets feared that rising U.S. interest rates could spur a potential recession this year. Mixed trade data from China also showed that Chinese commodity demand remained weak despite the lifting of anti-COVID restrictions earlier this year.

Tight supply conditions in the copper market may also be showing signs of easing, as production from major mines in Peru appeared to be normalizing after months of indigenous protests.

Copper shipments from Panama are also set to resume after the government reached a contract with Canadian miner First Quantum Minerals (TSX:FM) over the operation of a major mine.


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