Investing.com-- Gold prices moved little in Asian trade on Wednesday as traders kept to the sidelines ahead of key U.S. consumer inflation data, although mild declines in the dollar lent some strength to bullion.
Gold benefited from softer-than-expected producer inflation data in the prior session, which spurred some hopes that inflation will ease further in the coming months. This notion weighed on the dollar.
But bullion prices still remained largely rangebound as safe haven demand remained limited, while the prospect of slower interest rate cuts by the Federal Reserve also weighed on the outlook.
Spot gold rose 0.1% to $2,6675.90 an ounce, while gold futures expiring in February rose 0.3% to $2,690.91 an ounce by 23:59 ET (04:49 GMT).
CPI data awaited for more rate cues
Markets were now focused squarely on upcoming consumer price index inflation data, due later on Wednesday, for more cues on interest rates.
The reading is expected to show a mild pick-up in inflation through December, further tying into anxiety that U.S. interest rates will remain high amid sticky inflation.
While this notion was somewhat eased by softer-than-expected producer price index data, components of the reading which tie into PCE price index data- the Fed’s preferred inflation gauge- still showed underlying inflation remained sticky.
The central bank signaled a slower pace of rate cuts in 2025 due to concerns over a strong labor market and sticky inflation. Strong payrolls data released last week added to concerns over this outlook.
Policymakers were also seen fretting over the inflationary impact of trade tariffs under incoming President Donald Trump. But reports this week suggested that Trump’s team was preparing a plan for a gradual increase in tariffs.
Higher rates bode poorly for non-yielding assets such as gold, given that they increase the opportunity cost of investing in them. This notion kept gold trading in a tight range- between $2,600 and $2,700 an ounce- over the past month.
Other precious metals were mixed on Wednesday. Platinum futures fell 0.5% to $944.75 an ounce, while silver futures rose 0.2% to $30.427 an ounce.
Copper loses steam amid China focus
Among industrial metals, copper prices cooled after rising sharply so far in 2025 amid expectations of increased stimulus measures in top importer China.
Benchmark copper futures on the London Metal Exchange fell 0.6% to $9,101.50 a ton, while March copper futures fell 0.4% to $4.3293 a pound.
Weak economic readings from China sparked increased hopes that Beijing will unlock even more stimulus to support the economy, as did expectations of trade tariffs under Trump.
But import data released this week showed China’s copper imports hit a 13-month high in December, signaling that demand for the red metal remained strong.
Focus this week is on a decision by the People's Bank on its benchmark loan prime rate, due on Thursday.