Gold prices rose slightly in Asian trading on Wednesday after comments from Federal Reserve Chairman Jerome Powell sparked increased speculation about the timing of the Fed’s interest rate cuts. Among industrial metals, copper prices fell, erasing most of the recent recovery following mixed inflation signals from China, the world’s largest copper importer.
Gold has shown some strength in recent sessions with the dollar declining amid growing expectations of rate cuts in September. However, the Federal Reserve Chairman reiterated the Fed’s commitment to its 2% inflation target and did not provide any direct indications regarding the timing of rate cuts.
While traders largely maintained their bets on a rate cut in September, Powell’s testimony led to increased caution ahead of key consumer price index inflation data due on Thursday. The reading is expected to show further slowing inflation in June, although only slightly.
The dollar found some strength after Powell’s testimony. The Federal Reserve Chairman is also scheduled to testify before the House of Representatives later on Wednesday. Gold’s prospects have been largely tied to the path of interest rates this year, particularly as higher interest rates have pressured precious metals markets over the past two years.
Other metals declined on Wednesday. Platinum futures fell 0.3% to $997.05 per ounce, while silver futures dropped 0.1% to $31.025 per ounce. Copper prices also declined due to mixed inflation data in China. Benchmark copper futures on the London Metal Exchange fell 0.3% to $9,844.50 per ton, while one-month copper futures fell 0.4% to $4.5652 per pound.
Sentiment towards copper was hit by mixed inflation data from China. The Chinese consumer price index inflation rate shrank in June as spending remained under pressure due to weak economic expectations for China. While the producer price index inflation rate contracted at its slowest pace in 16 months, the deflationary trend in China largely persisted.
