Gold steady above $2,000 as markets await U.S. inflation data
2023.05.08 22:06
© Reuters.
Investing.com– Gold prices steadied above key levels on Tuesday, keeping to slim trading ranges as traders awaited more cues on the U.S. economy from key inflation data due this week, while concerns over a banking crisis and a potential recession remained in play.
The yellow metal saw a heavy dose of profit taking on Friday, plummeting from near record highs as a stronger-than-expected suggested that the Federal Reserve will remain hawkish for longer this year.
While markets expect the bank to likely pause its rate hike cycle, they have also begun scaling back bets on potential rate cuts this year. Any upside in gold is likely to be held back by interest rates remaining higher for longer.
Safe haven demand for gold also retreated in recent sessions. Fears of an imminent U.S. banking crisis eased as a showed on Monday that the recent collapse of several banks had not impacted credit conditions as drastically as feared.
rose 0.1% to $2,022.85 an ounce, while fell 0.2% to $2,029.85 an ounce by 21:58 ET (01:58 GMT).
Market focus is now chiefly on U.S. inflation data due on Wednesday, which is expected to show that inflation eased slightly in April from the prior month. But inflation is still expected to remain well above the Fed’s annual target range, potentially eliciting a hawkish reaction from the central bank to the data.
shows that markets are pricing in an 88% chance that the Fed will keep its rates on hold in June. But markets also trimmed their bets on any potential rate cuts this year, given that the Fed has largely downplayed the possibility of such a scenario.
Other precious metals retreated slightly on Tuesday. fell 0.3% to $1,080.45 an ounce, while fell 0.1% to $25.808 an ounce.
Among industrial metals, copper prices retreated on Tuesday after logging strong gains over the past four sessions. fell 0.5% to $3.9052 a pound.
But despite recent gains, the red metal still remained under pressure from concerns over slowing demand this year, especially as global economic conditions deteriorate.
Focus is now on a slew of indicators from major importer China, starting with due later in the day.
