Gold Prices Near $2,300 Breakdown Amid Ongoing Interest Rate Concerns

Gold Prices Near Key Support Level as U.S. Rate Outlook Dampens Safe Haven Appeal

In Thursday’s Asian trading session, gold prices edged closer to dipping below the crucial $2,300 support level, reflecting decreased demand for safe-haven assets amid expectations of persistent high U.S. interest rates. The yellow metal faced downward pressure as geopolitical tensions between Iran and Israel did not escalate as previously feared, reducing the appeal of gold as a refuge.

Spot gold experienced a minor decline of 0.1% to $2,313.62 per ounce, while June gold futures dropped by 0.6% to $2,325.05 per ounce as of 00:26. The strength of the U.S. dollar, hovering near a five-month high, also contributed to the lower gold prices.

Investors are now turning their attention to forthcoming U.S. economic indicators for further direction. Notably, first-quarter GDP data, expected later today, will provide insights into the resilience of the U.S. economy at the start of 2024. Additionally, the upcoming PCE price index data, a critical measure for the Federal Reserve’s rate decisions, will likely influence gold’s short-term trajectory.

With traders adjusting their expectations away from a potential June rate cut following strong U.S. inflation figures and firm Fed stances, gold remains under pressure. The broader precious metals market also reflected this sentiment, with platinum futures falling 0.3% to $910.30 an ounce and silver futures decreasing by 1% to $27.078 an ounce.

In the industrial metals sector, copper prices retreated from two-year highs amid mixed economic signals and interest rate concerns. Three-month copper futures on the London Metal Exchange dropped by 0.2% to $9,773.0 a ton, while one-month futures declined slightly by 0.1% to $4.4510 a pound. Despite earlier gains driven by tighter market conditions due to sanctions on Russian exports, optimism waned following announcements of increased production by Chile’s state-owned miner, Codelco, and weaker-than-expected U.S. manufacturing data for April.

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