By Ambar Warrick

--Gold prices fell slightly on Wednesday after logging a two-day recovery from their lowest levels this year, with focus remaining on any more signals on the U.S. economy and the Federal Reserve. 

The yellow metal had fallen for five consecutive days to its lowest level since late-December, as a series of strong U.S. inflation readings and hawkish signals from the Fed drove investors out of non-yielding assets, chiefly metals.

fell 0.1% to $1,825.29 an ounce, while fell 0.1% to $1,831.95 an ounce by 19:03 ET (00:03 GMT). Both instruments rose about 1% over the past two sessions. 

Metal markets took some relief from some softer-than-expected and data on Tuesday, which indicated that certain facets of the economy were cooling under rising interest rates.

Markets are betting that a further slowdown in the U.S. economy this year will push the Fed into pausing its rate hike cycle, which could benefit gold and other precious metals. But the central bank has given no such indication on when it will pause its rate hikes, and has also said that it is seeking a further cooling in the economy. 

Focus this week is on upcoming business activity readings for February, due on Wednesday and Thursday. The U.S. is expected to remain in contraction territory, offsetting strength in the . 

Any signs of additional weakness in the U.S. economy could support metal prices. Metal markets were ravaged by rising interest rates in 2022, which has kept traders hoping for any signs of a slowdown in hikes.

The was trading close to a two-month high against a basket of currencies, also pressuring metal prices after staging a strong recovery this year.

Other precious metals fell on Wednesday. sank 0.4% to $951.80 an ounce, while fell 0.4% to $20.983 an ounce, with both metals coming off strong gains in the prior session.

Among industrial metals, copper prices fell slightly on Wednesday after a strong three-day rally on hopes of a demand recovery in China. 

fell 0.1% to $4.0728 a pound, after surging nearly 3% over the past three sessions. 

Markets are awaiting from China, due later in the day, for more cues on an economic recovery in the world’s largest commodity importer.