By Ambar Warrick
Investing.com -- Gold and copper prices fell slightly on Wednesday as markets awaited fresh cues on monetary policy from a string of major central bank meetings this week, starting with the Federal Reserve later in the day.
The Fed is widely expected to hike interest rates by 25 basis points later in the day. But the central bank’s outlook on monetary policy will be closely watched, with investors waiting to see how Chair Jerome Powell will address recent signs of resilience in the U.S. economy, as well as a recent rally in global financial markets.
Gold marked a strong start to 2023, rising 5.7% in January amid increasing bets that the Fed will soften its hawkish stance in the coming months. The yellow metal also benefited from resurgent safe haven demand, amid increasing fears of a looming global recession.
Spot gold fell 0.1% to $1,926.94 an ounce, while gold futures expiring in April fell 0.2% to $1,942.10 an ounce by 19:20 ET (00:20 GMT). While the prices of the yellow metal rose sharply over the past three months, their next move will likely be determined by the Fed.
Given the recent rally, metal markets have also turned more cautious in anticipation of the central bank. Gold, for instance, has moved less than 0.3% in either direction over the past three sessions.
Other precious metals also retreated. Platinum futures fell 0.3% to $1,017.15 an ounce, while silver futures fell 0.4% to $23.742 an ounce.
The dollar steadied from recent losses this week, also pressuring commodity markets. Focus is also on the European Central Bank and the Bank of England, both of which are expected to hike rates by 50 basis points each on Thursday.
Among industrial metals, copper prices retreated in anticipation of more signs of an economic recovery in China, the world’s largest importer of the red metal.
High-grade copper futures fell 0.2% to $4.2165 a pound in early trade on Wednesday.
Prices of the red metal advanced on Tuesday after government data showed that Chinese business activity rebounded sharply in January after the country relaxed its strict anti-COVID policies.
Markets are now awaiting private sector data to confirm this trend.