(MENAFN) Gold prices experienced a decline during early Wednesday trading, reflecting waning fears of escalating conflict in the Middle East, while investors eagerly awaited crucial US economic data that could offer insights into the timing of potential interest rate adjustments. In immediate transactions, gold edged down by 0.1 percent to USD2,320.19 per ounce as of 0115 GMT, following its recent dip to levels not seen since April 5 in the preceding session. The precious metal, which had surged by approximately USD400 from March to April, hitting an unprecedented high of USD2,431.29 on April 12, saw a slight retreat in US gold futures prices as well, slipping by 0.4 percent to USD2,333.80 per ounce.
The easing of concerns regarding a broader regional conflict in the Middle East contributed to the subdued sentiment in the gold market, particularly after Iran signaled its reluctance to retaliate following what appeared to be an Israeli drone attack. Additionally, recent statements from Federal Reserve officials suggesting a lack of immediate urgency in lowering interest rates tempered expectations within the market, with traders now anticipating the possibility of the first rate cut in the US occurring around September.
The allure of gold, often considered a safe-haven asset, diminishes in environments characterized by high interest rates, given its non-yielding nature. As investors navigate shifting monetary policy expectations, all eyes are on the upcoming release of March personal consumption spending data, a key indicator closely monitored by the Federal Reserve as a gauge of inflationary trends. Insights gleaned from this data will likely play a pivotal role in shaping market expectations regarding the trajectory of monetary policy moving forward.
In terms of other precious metals, silver witnessed a slight decline in spot transactions, slipping by 0.2 percent to USD27.24 per ounce, while palladium also experienced a marginal decrease of 0.1 percent to USD1018.50. Conversely, platinum bucked the trend by posting a modest increase of 0.3 percent, reaching USD910.15 per ounce. Amidst these fluctuations, market participants remain attuned to evolving geopolitical developments and macroeconomic indicators, navigating a complex landscape of factors influencing the prices of precious metals.
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