Gold prices muted as US rate jitters build

Gold prices moved little in Asian trade on Wednesday, coming under pressure from a rebound in the dollar as traders continued to fret over the prospect of slower monetary easing in 2025.

Strong U.S. data released overnight furthered expectations of slower rate cuts, especially amid growing signs that the labor market remained robust. Treasury yields rose sharply on Tuesday, while the dollar rebounded from one-week lows.

Gold saw little safe haven demand, even as an increasingly worsening rhetoric between the U.S. and China pushed up concerns over a global trade war, especially as incoming President Donald Trump prepares more trade tariffs on China.

Spot gold was flat at $2,649.47 an ounce, while gold futures expiring in February fell 0.1% to $2,662.24 an ounce by 00:27 ET(05:27 GMT).  Gold prices pressured by US rate jitters 

The dollar steadied on Wednesday after an overnight bounce, as stronger-than-expected job openings data pointed to sustained strength in the labor market.

The reading comes just days before key nonfarm payrolls data for December, which is set to offer more definitive cues on the labor market this week. 

Strong purchasing managers index data for December also spurred concerns over sticky inflation.

Sticky inflation and strength in the labor market are expected to give the Federal Reserve less impetus to cut interest rates, with the bank having warned as much during its December meeting. 

Hawkish comments from Fed officials reiterated this notion earlier in the week. 

Higher for longer rates bode poorly for gold and metal markets, given that they increase the opportunity cost of investing in non-yielding assets. 

Other precious metals were mildly weaker on Wednesday. Platinum futures fell 0.2% to $973.60 an ounce, while silver futures fell 0.1% to $30.663 an ounce.  Copper price advance with China inflation in focus 

Among industrial metals, copper prices rose slightly, with focus turning to more economic cues from top importer China, due later in the week.

Benchmark copper futures on the London Metal Exchange rose 0.1% to $8,992.0 a ton, while March copper futures rose 0.3% to $4.1905 a pound. 

China is set to release inflation figures for December on Thursday, offering up more economic cues on the country as Beijing struggles to shore up growth.

The government is expected to ramp up fiscal spending this year to support the economy, especially in the face of trade-related headwinds from a Trump administration.

Source: Investing.com