Investing.com– Gold prices kept to a tight range in Asian trade on Wednesday as further losses in the yellow metal were limited by a weaker dollar, although anticipation of more cues on interest rates kept traders wary of the yellow metal.
Bullion prices were nursing a sharp drop from recent record highs as easing tensions over a war between Iran and Israel sapped away at safe-haven demand for the yellow metal.
rose 0.3% to $2,330.05 an ounce, while expiring in June steadied at $2,343.15 an ounce by 00:04 ET (04:04 GMT). Spot prices were now trading about $100 away from a record high hit earlier in April.
Dollar weakness offers limited relief to gold prices
The fell in overnight trade after softer-than-expected data for April.
Weakness in the greenback helped stem a recent drop in gold, given that most metal prices are pegged to the dollar.
But the dollar still retained a bulk of its gains made so far in April, as markets steadily priced out expectations of early interest rate cuts by the Federal Reserve.
While safe haven demand had initially helped gold rise past these headwinds, a lack of escalation in the Middle East now left bullion vulnerable to fears of higher-for-longer rates.
High rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.
Other precious metals rose in Asian trade against a weaker dollar, but were still nursing steep losses in recent sessions. rose 0.4% to $924.50 an ounce, while rose 0.5% to $27.485 an ounce.
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GDP, PCE inflation data awaited for more rate cues
Market focus was now squarely on key upcoming U.S. economic readings, which are potentially set to offer more cues on interest rates.
First-quarter data is due on Thursday, while data- the Fed’s preferred inflation gauge- is due on Friday.
Recent indicators showing sticky U.S. inflation saw markets pricing out expectations for a rate cut in June.
Copper prices rise, but remain below recent peaks
Among industrial metals, copper prices advanced on Wednesday, also benefiting from a softer dollar. But prices of the red metal still traded below recent two-year peaks, after top producer Chile signaled that it planned to increase output this year.
The outlook for copper demand was also dented by weak U.S. PMI data, which showed an unexpected contraction in .
on the London Metal Exchange rose 0.8% to $9,817.50 a ton, while rose 1.1% to $4.4710 a pound.