© Reuters

Investing.com– Gold prices steadied in Asian trade on Wednesday, but were nursing a tumble from record highs after a strong U.S. inflation reading kept fears of higher-for-longer interest rates in play. 

The yellow metal was also hit with a degree of profit-taking after surging as high as $2,200 earlier this week. While gold’s initial bounce was triggered by bets on early interest rate cuts by the Federal Reserve, Tuesday’s data swiftly cooled those bets. 

steadied at $2,159.32 an ounce, while expiring in April fell 0.1% to $2,164.45 an ounce by 00:13 (04:13 GMT). Both instruments were down about 2% each from record highs hit earlier this week. 

Spot gold hit a record high of $2,195.20 an ounce, while gold futures hit a peak of $2,203.0 an ounce on Monday.

CPI data puts rate cuts in focus, more economic cues awaited 

CPI data showed U.S. inflation grew slightly more than expected in February, remaining well above the Fed’s 2% annual target. 

The reading presents the Fed with less impetus to begin trimming interest rates early, although traders still maintained bets on a 70% chance for a 25 basis point cut in June, according to the tool.

The CPI data now puts upcoming and readings squarely in focus for more cuts on the U.S. economy. Any more signs of resilience in the economy give the Fed more headroom to keep interest rates higher for longer.

Such a scenario bodes poorly for gold, with strength in the U.S. economy also likely to sap the yellow metal of safe haven demand. But the yellow metal was still sitting on strong gains so far in 2024. 

Gold and other precious metals were also pressured by overnight strength in the and U.S. Treasury yields. 

steadied around $927.90 an ounce, while fell 0.4% to $24.297 an ounce. 

Copper prices muted, China cheer cools

Among industrial metals, expiring in May fell 0.2% to 3.9283 a pound. 

The red metal saw some strength in recent sessions on hopes that top importer China will roll out more stimulus measures to support an economic recovery this year. 

But the economic outlook for China remained dour, especially after Beijing set a largely underwhelming GDP target for 2024, at 5%- the same as 2023.