Gold Prices Slightly Fall but Stay Near Record High

Gold prices fell slightly in Asian trade on Wednesday but remained close to a record high as traders anticipated signs of easing consumer inflation following a soft producer inflation report.

The dollar neared eight-month lows after a weak inflation reading, benefiting most metal prices. However, cautious sentiment prevailed before the consumer price index (CPI) reading on Wednesday.

• Spot gold dipped 0.2% to $2,461.11 an ounce.
• Gold futures expiring in December decreased 0.3% to $2,500.40 an ounce by 00:43 ET (04:43 GMT).

Gold Keeps Record High in Sight as CPI Approaches

Gold futures reached record highs this week, with spot prices eyeing a $2,483.78 record. Gains in the yellow metal were driven by soft producer price index (PPI) data, increasing bets that the Federal Reserve might opt for a 50 basis points interest rate cut in September, despite the market still pricing in a potential 25 bps cut.

The softer PPI data heightened hopes that the forthcoming CPI data would also indicate inflation decline in July. Lower interest rates are beneficial for gold as they diminish the opportunity cost of investing in non-yielding assets.

Increased safe haven demand was noted after reports indicated Iran’s potential retaliatory actions against Israel following the assassination of a Hamas leader.

Other precious metals experienced mixed results:
– Platinum futures fell 0.7% to $939.95 an ounce.
– Silver futures rose 0.2% to $27.832 an ounce.

Copper Sees Some Gains on Supply Disruption Fears

In industrial metals, copper prices decreased on Wednesday but recovered slightly due to supply concerns from a significant union strike at BHP’s Escondida mine in Chile, which represents nearly 5% of global copper supplies.

Production disruptions at the mine suggest potential supply shortfalls in the copper market, with a previous 44-day strike in 2017 leading to a substantial price increase.

Benchmark copper futures on the London Metal Exchange dropped 0.2% to $8,963.0 a ton, and one-month copper futures fell 0.4% to $4.0450 a pound. Both contracts had seen gains earlier this week after concerns over Chinese demand had driven copper prices to a four-month low.

More economic data from China, including industrial production and retail sales, is expected on Thursday.