Investing.com — Gold prices saw extended losses in Asian trading on Thursday, retreating further from record highs as renewed concerns about high interest rates and declining demand for safe havens battered the yellow metal.
Industrial metals also benefited from the losses, with copper prices falling sharply from record highs due to profit-taking and pressure from the dollar. But prices of the red metal remained stable in Asian trading.
fell 0.3 to $2,372.38 per ounce, while June expiration at 00:22 ET (04:22 GMT) fell 0.8 to $2,375.15 per ounce. Spot prices were now well below the record high of $2,450 per ounce at the start of the week.
Rate fears are rising as Fed minutes reveal concerns about persistent inflation
Metals prices were pressured by a sudden rebound in yields, which reached a one-week high after minutes of the Federal Reserve’s late April meeting showed policymakers were increasingly concerned about persistent inflation.
Some policymakers were also open to raising interest rates further to reduce inflation, although such a scenario seemed unlikely.
Still, the Fed is likely to keep interest rates high for longer in light of persistent inflation. Statements from several policymakers this week showed that the bank had limited confidence that inflation would reach its annual target of 2% in the short term.
High long-term interest rates do not bode well for gold and other precious metals, as they increase the opportunity cost of investing in them. This idea has made the all-time gold encounter fleeting so far this year.
The lack of a major deterioration in geopolitical tensions in the Middle East following the death of the Iranian president also undermined demand for gold as a safe haven.
Other precious metals also fell on Thursday. fell 0.% to $1,041.20 per ounce, while it fell 2.5% to $30.727 per ounce.
Copper prices plummet due to profit taking, China is itching
fell 0.4% to $10,372.50 per tonne, while holding steady at $4.8030 per pound. Both contracts saw a steep decline from the record highs seen early this week.
The losses in copper came as a speculative frenzy in the red metal appeared to be stabilizing, leaving it open to profit-taking after a strong run last week.
Concerns about China are also creeping back into the markets, now that the trade war between Washington and Beijing seemed to be intensifying. This somewhat undermined optimism about China’s recent stimulus efforts, although markets also waited to see how the measures would be implemented.
