Gold prices edged higher during Wednesday’s Asian trading session, bouncing back from earlier losses after U.S. consumer inflation data exceeded expectations, strengthening the dollar and dampening hopes for near-term interest rate cuts.
Other precious metals also rebounded after recent declines. Platinum and silver, which had outperformed gold recently, gave up some of their gains this week as investors took profits.
Safe-haven demand for gold remained firm amid ongoing worries about President Donald Trump’s trade tariffs. Additional uncertainty around the Federal Reserve’s independence added to gold’s support, as political pressure mounts for Fed Chair Jerome Powell’s removal. Geopolitical tensions between Russia and Ukraine further underpinned demand for the metal.
Spot gold climbed 0.4% to $3,339.26 per ounce, while September gold futures rose 0.3% to $3,345.40 per ounce by early Wednesday ET.
Gold Remains Within Range as Other Metals Show Volatility
Despite modest gains, gold stayed within a familiar trading band between $3,300 and $3,500 per ounce, a range it has occupied for the past three months. The metal has struggled to break out amid speculation that recent record highs in April left gold somewhat overbought, particularly compared to other precious metals.
Platinum and silver surged ahead in recent months, hitting multi-year highs. Their gains were partly fueled by investors seeking alternatives to gold at more attractive valuations, combined with expectations of tighter supply and stronger demand.
However, both metals pulled back this week amid fading bets on imminent Federal Reserve rate cuts. Spot platinum steadied at $1,421 per ounce, while silver rose slightly to $37.84 per ounce.
Stronger Dollar Weighs on Metals as Inflation Concerns Persist
The broader metal market felt pressure from a stronger U.S. dollar, which reached a three-week high on Tuesday following higher-than-expected inflation data for June.
Copper futures on the London Metal Exchange were flat at $9,639.70 per ton, while U.S. copper futures declined 0.4% to $5.50 per pound.
Although the Consumer Price Index showed only a modest increase from May, the data suggested inflation remains sticky. This raised concerns about the inflationary effects of tariffs imposed by President Trump.
The Federal Reserve indicated it would hold interest rates steady until the impact of tariffs becomes clearer, a message reinforced by Tuesday’s inflation report. This stance, however, has drawn criticism from Trump and his supporters, who continue to push for Powell’s removal and for rate cuts.
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