Investing.com– Gold prices steadied near a two-week high in Asian trade on Wednesday as geopolitical instability in Asia and the Middle East underpinned safe haven demand. 

The yellow metal also caught some bids as markets turned risk-averse ahead of key U.S. inflation data due later on Wednesday, which is likely to factor into the outlook for rates. 

Among industrial metals, copper prices rose sharply on sustained optimism over more stimulus measures in top importer China. Encouraging copper import data from the country also aided sentiment. 

steadied at $2,694.16 an ounce, while expiring in February rose 0.8% to $2,739.82 an ounce by 23:29 ET (04:29 GMT). 

China-Taiwan, Syria tensions spur haven demand 

Gold gains this week came amid increased geopolitical tensions in the Middle East, after rebels overthrew the Syrian government. Markets were waiting to see just what this would entail for the region, given that it potentially loosens Iran’s hold in the Middle East. 

In Asia, Taiwan raised an alert after China allegedly engaged in its largest maritime movements around the island in decades. China was seen sending about 90 ships in reported war drills around Taiwan.

Political instability in South Korea also remained in focus, with President Yoon Suk Yeol facing criminal charges over a failed attempt to impose martial law last week. 

CPI data awaited, dollar firms

Beyond geopolitics, risk appetite was also strained by anticipation of key U.S. data on Wednesday, which is likely to factor into the Federal Reserve’s plans for interest rates. 

While the did firm before the CPI reading, it did little to deter gold’s gains, as markets also retained bets that the Fed will next week. 

Other precious metals were mixed. rose 0.3% to $950.80 an ounce, while fell 0.2% to $32.678 an ounce.

Copper upbeat on China cheer; CEWC in focus 

Benchmark on the London Metal Exchange rose 0.4% to $9,277.50 a ton, while February rose 0.6% to $4.2978 a pound. 

The red metal firmed sharply this week after top importer China vowed to loosen monetary policy and dole out targeted fiscal measures to boost economic growth.

Focus is now on China’s Central Economic Work Conference, which begins on Wednesday and is likely to set the economic agenda for 2025, including Beijing’s plans for stimulus. 

Data showing a sharp increase in Chinese copper imports through November also aided sentiment.