Gold Prices Tread Water Ahead of Crucial U.S. Inflation Data

Gold prices experienced a slight dip in Asian trading on Friday, remaining within a tight range as traders favored the U.S. dollar in anticipation of key inflation data that could influence interest rates. Despite recovering from a dip below the $2,300 an ounce support level earlier in the week, gold has remained largely rangebound throughout June due to uncertainty surrounding the future of U.S. monetary policy.

Traders are eagerly awaiting Friday’s release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. Forecasts predict inflation to remain stubbornly above the central bank’s 2% target, a scenario that typically bodes poorly for gold and other non-yielding assets due to the increased opportunity cost.

Other precious metals also saw minimal movement on Friday but have managed to secure some gains throughout the second quarter. Platinum futures rose 0.6% to $1,010.05 an ounce, and silver futures edged up 0.2% to $29.328 an ounce. While expectations of interest rate cuts initially boosted metal markets in the second quarter, traders tempered their optimism in June, leading most metals to relinquish their quarterly gains.

Meanwhile, copper prices saw a modest increase on Friday, but the metal is poised to end June in negative territory. Concerns over weakening global demand and a potential trade war between China and the West have weighed on copper prices, with benchmark futures on the London Metal Exchange falling between 4% and 5.5% in June.

Investors are now turning their attention to upcoming purchasing managers index (PMI) data from China, due over the weekend, which will provide further insights into the health of the world’s largest copper consumer and could significantly impact market sentiment.

In summary, gold prices remain rangebound as traders exercise caution ahead of crucial U.S. inflation data, while other precious metals also see limited movement. Copper prices have struggled in June due to concerns over global demand and geopolitical tensions, with investors eagerly awaiting PMI data from China for further clues on the metal’s future trajectory.