Investing.com– Gold prices rose slightly in Asian trade on Wednesday, keeping recent record highs in sight as traders waited to see just by how much the Federal Reserve will cut interest rates. 

Bullion prices briefly hit record highs this week amid growing expectations for a 50 basis point cut, which dented the dollar and Treasury yields. But some stronger-than-expected U.S. data complicated expectations of a large rate cut.

rose 0.2% to $2,574.15 an ounce, while rose 0.3% to $2,600.40 an ounce by 00:16 ET (04:16 GMT). 

Gold just below record highs with rate cuts in focus 

Spot prices were just below a record high of $2,589.78 an ounce hit earlier this week. 

Gold’s biggest point of support was growing conviction that the Fed will at the conclusion of a meeting later on Wednesday.

While markets were initially split over a 25 or 50 basis point cut, showed expectations shifting towards a 50 bps reduction in recent sessions.

Bets on a 50 bps cut persisted even as recent and inflation data read stronger than expected, reflecting some resilience in the U.S. economy.

But concerns over a weakening labor market are expected to see the Fed kick off an easing cycle that could bring interest rates lower by at least 100 bps by the end of 2024.

Lower rates bode well for gold and other precious metals, given that they herald a lower opportunity cost to invest in non-yielding assets. 

But other precious metals lagged gold, with down 0.5% to $983.90 an ounce, while fell 0.5% to $30.837 an ounce.

Copper slides as China markets reopen 

Among industrial metals, copper prices fell on Wednesday as markets in top importer China reopened after a long weekend, with local traders reacting to more weak economic data from the country.

Benchmark on the London Metal Exchange fell 0.6% to $9,326.50 a ton, while one-month fell 0.9% to $4.2475 a pound. 

Weak industrial production and retail sales data from China, released over the weekend, pointed to sustained weakness in the country’s biggest economic engines, which traders feared could further dent its appetite for copper.

But the weak readings also spurred some bets that Beijing will be forced into rolling out more stimulus measures, which could boost near-term growth and help buoy copper demand. 

This notion helped limit overall losses in copper.

Investing.com– Oil prices fell in Asian trade on Wednesday, cutting short a recent rebound as industry data showed an unexpected increase in U.S. inventories. 

But prices were sitting on strong gains over the past week as persistent supply disruptions from Hurricane Francine and the prospect of lower rates saw traders pile into crude at heavily discounted levels. 

An escalation in Middle East tensions also helped spur some demand for crude, as Hezbollah vowed retaliation against Israel after accusing it of detonating pagers across Lebanon this week. 

fell 0.4% to $73.41 a barrel, while fell 0.4% to $69.69 a barrel by 21:17 ET (01:17 GMT). Both contracts rose sharply from near three-year lows over the past week.

US inventories unexpectedly increase- API 

Data from the showed U.S. oil inventories saw an unexpected build in the week to September 13.

Inventories grew by 1.96 million barrels, compared to expectations for a draw of 0.1 mb and a 2.79 mb draw from the prior week. 

The reading comes after official data last week showed a build in U.S. inventories, indicating that demand in the world’s biggest fuel consumer was cooling with the end of the travel-heavy summer season.

The API data usually heralds a similar reading from , which is due later on Wednesday. The unexpected build also indicates limited, actual disruptions to production from Hurricane Francine, which barreled through the Gulf of Mexico last week. 

Demand concerns, rate cuts in focus 

Chinese markets reopened on Wednesday after an extended holiday, with local traders reacting to a barrage of weak economic readings from the country. 

The readings had ramped up concerns over slowing growth in the world’s biggest oil importer, which could potentially dent its appetite for crude. 

Markets were also on edge before the conclusion of a two-day later in the day, where the central bank is widely expected to cut interest rates for the first time in over four years.

Markets are split between expectations for a 25 or 50 basis point reduction.

Anticipation of Wednesday’s decision pulled down the dollar, which helped spur some gains in crude.

By Sabrina Valle

HOUSTON (Reuters) -Chevron CEO Michael Wirth on Tuesday criticized U.S. President Joe Biden’s administration for what he described as “attacks on the natural gas” industry and emphasized the crucial role of Permian in powering the rapid growth of artificial intelligence (AI).

The CEO’s remarks followed new government plans over policies to prevent power-hungry AI data centers from undercutting U.S. climate goals. Last week, the White House launched a task force on AI Datacenter Infrastructure to coordinate policies in line with the government’s economic and environmental goals.

Wirth defended leveraging low-carbon gas over coal to meet the increasing energy demands of the AI sector.

“AI’s advance will depend not only on the design labs of Silicon Valley, but also on the gas fields of the Permian basin,” Wirth said at Gastech conference in Houston.

Chevron (NYSE:), the No.2 U.S. oil producer, is one of the top players in the Permian basin that straddles Texas and New Mexico. The Permian is the biggest U.S. oilfield and accounts for 15% of the nation’s gas output.

Wirth said the Biden administration’s approach to pause liquefied natural gas (LNG) exports “elevates politics over progress.”

In January, Biden announced the pause on approvals for pending and future applications to export LNG from new projects, a move cheered by climate activists, that could delay decisions on new plants until after the Nov. 5 election.

He argued that a moratorium on LNG exports would increase energy costs, threaten reliable supplies, and slow the switch from coal to natural gas, leading to more emissions rather than less.

“Instead of imposing a moratorium on LNG exports, the administration should stop the attacks on natural gas,” he added.

Wirth underscored the role of gas in reducing global carbon emissions, citing data from the International Energy Agency (IEA) that attributed over a third of total global greenhouse gas emissions in 2022 to coal combustion.

Switching from coal to gas, he suggested, could be “the single greatest carbon reduction initiative in history.”

“The case for natural gas is so strong that only politics can get in the way,” he said.

In the midst of the global desire to decarbonize, Wirth stressed the need for a stable and predictable policy environment to ensure gas remains a reliable energy source.

He outlined three pillars for a balanced energy future: political support for gas as a key to a lower carbon future; recognition of the progress made in deploying new technologies and gas solutions; and understanding that the energy transition requires unprecedented innovation and collaboration.