Gold prices dip, but $2,000 in sight as economic outlook darkens
2023.04.03 22:31
© Reuters.
By Ambar Warrick
Investing.com– Gold prices fell slightly on Tuesday after rallying back to key levels in the prior session as markets considered the potential for more economic turmoil this year amid a manufacturing slowdown and rising fuel costs.
The yellow metal saw a resurgence in safe haven demand on Monday after a string of weak manufacturing readings from the world’s largest economies, which could herald a potential economic slowdown later this year.
Market were also caught off guard by a surprise output cut by the Organization of Petroleum Exporting Countries and allies (OPEC+), which is likely to result in higher fuel prices and potentially higher inflation.
fell 0.2% to $1,980.99 an ounce, while fell 0.1% to $1,997.85 an ounce by 21:23 ET (02:23 GMT). Both instruments rallied over 1% on Monday.
Manufacturing data from the , , and showed that activity in the world’s largest economies remained in contraction through March. This, coupled with a from China, pushed up concerns that global economic growth will weaken in the coming months.
Softer-than-expected U.S. data also saw markets question just how much economic headroom the Federal Reserve will have to keep raising interest rates. This notion weighed on the in overnight trade, with the greenback moving little in Asian trade on Tuesday.
Still, the spike in oil prices saw markets begin pricing in a greater chance of in the near-term, especially if higher fuel costs drive up inflation.
Focus this week is now on U.S. data, due on Friday, for more cues on the labor market.
Gold prices saw strong gains in March, retaking the $2,000 level after the collapse of several U.S. banks ramped up fears of more economic turmoil. While regulatory intervention assuaged fears of an immediate collapse, gold has remained relatively well bid in recent weeks.
Other precious metals moved in a flat-to-low range on Tuesday. fell 0.3% to $996.0 an ounce, while steadied at $24.027 an ounce.
Among industrial metals, copper prices came under pressure from a worsening outlook for global manufacturing activity, particularly amid signs of cooling growth in major importer China.
fell 0.3% to $4.0415 a pound, and were set for a third straight day in red.
