Gold prices stabilized on Thursday, 28 March, remaining close to their record high, as traders purchased the precious metal in anticipation of further data concerning U.S. inflation and interest rates. Meanwhile, copper prices rebounded after recent losses and approached 11-month highs, following reports that Chinese copper smelters were proposing reductions in output.
Read more: Gold prices in Saudi Arabia slightly decrease as dollar holds firm
In Saudi Arabia, the 24K gold surged on Thursday to SAR3.077. Furthermore, the 10 grams of 24K gold is being sold for SAR2.641 in the Kingdom while the per ounce gold price stands at SAR8.213. Other variants of gold also had opening prices, with 22K at SAR253, and 18K at SAR207 per gram.
This week, bullion prices recovered a significant portion of their previous losses due to expectations that the U.S. Federal Reserve might implement interest rate cuts as early as June. However, the strength of the dollar, which reached a one-month high, prevented gold prices from reaching new record levels.
At 01:09 ET (05:09 GMT), spot gold remained stable at $2,195.34 per ounce, while gold futures expiring in April also steadied at $2,215.80 per ounce. Last week, spot prices came close to their all-time high of $2,222.90 per ounce.
Market focus: PCE Price Index data release
The focus now shifted to the release of the PCE price index data, which is the Fed’s preferred measure of inflation and is scheduled for Friday. Any indications of decreasing inflation are likely to result in significant gains in the metal markets, as they would increase the likelihood of early interest rate cuts. Additionally, market participants will closely monitor separate speeches by Fed Chair Jerome Powell and FOMC member Mary Daly on Friday, particularly for any signals regarding interest rate cuts, following a somewhat hawkish stance expressed by other Fed officials earlier in the week.
Governor Christopher Waller cautioned that the central bank was not in a rush to initiate rate cuts, citing persistent inflation and the resilience of the U.S. economy. Higher interest rates over an extended period would unfavorably impact gold prices by raising the opportunity cost of investing in the precious metal. This sentiment also exerted pressure on other precious metals. Platinum futures rose by 0.3 percent to $914.0 per ounce, while silver futures stabilized at $24.777 per ounce.
Copper futures show positive movement
On the London Metal Exchange, three-month copper futures climbed by 0.5 percent to $8,913.0 per ton, and one-month U.S. copper futures increased by 0.4 percent to $4.0303 per pound. Reuters reported that major Chinese copper smelters were contemplating output reductions and had not provided guidance for copper prices in the second quarter. The news of potential production cuts in China, which would lead to tighter markets for refined copper, had driven significant price increases in March, pushing copper to its highest level in 11 months. However, these gains were offset by data indicating that Chinese copper inventories remained substantial, suggesting that the markets might not be as tight as initially anticipated.
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