Gold Prices Dip as Fed Officials Temper Rate Cut Hopes, Copper Mixed on China Data
Gold Prices Dip Amid Fed's Cautious Rate Cut Outlook
Gold prices fell slightly on Friday, trimming some of their gains for the week as comments from a slew of Federal Reserve officials offered a more sobering outlook on interest rate cuts.
Weekly Performance and Recent Highs
The yellow metal had risen to nearly $2,400 an ounce this week in the immediate aftermath of some soft U.S. economic readings. However, it pulled back from these levels on Thursday and Friday.
Spot gold steadied at $2,377.40 an ounce, while gold futures expiring in June fell slightly to $2,381.10 an ounce by 00:19 ET (04:19 GMT).
Fed Officials Temper Rate Cut Expectations
Gold prices retreated on Thursday after several Fed officials cautioned against immediate interest rate cuts. Members of the central bank’s rate-setting committee stated that more evidence was needed to confirm a significant decline in inflation beyond April's marginally soft inflation reading.
This led traders to scale back their expectations for a rate cut in September. Consequently, the dollar and U.S. Treasury yields rebounded from earlier losses this week.
Weekly Gains Despite Pullback
Despite the pullback, softer-than-expected consumer price index readings set gold on course for a 0.7% weekly gain. The yellow metal remained within sight of its record high of above $2,430 an ounce, although it appeared unlikely that this level would be met in the near term.
Performance of Other Precious Metals
Other precious metals also retreated on Friday but were set for substantial weekly gains. Platinum futures fell 0.2% but were trading up 6.2% for the week, while silver futures fell 0.4% but were up 4.5% this week.
Copper Prices Mixed Amid Economic Data from China
Among industrial metals, copper prices showed mixed trends amid middling economic data from China. One-month copper futures tumbled from two-year highs, tracking economic data, while three-month copper futures pushed higher, buoyed by market bets on tighter supplies and an eventual demand recovery.
Three-month copper futures on the London Metal Exchange rose 0.6% to $10,445.0 a ton, while one-month copper futures rose 0.3% to $4.8935 a pound.
Mixed Economic Indicators from China
Data from China on Friday presented a mixed economic outlook. While industrial production grew more than expected, retail sales growth slowed, and house prices shrank at an accelerated pace. Growth in Chinese fixed asset investment also slowed.
These readings provided a muddled picture for the world’s biggest copper importer, even as it rolled out more stimulus measures to shore up growth.
Weekly Performance of Copper
Three-month copper futures gained on the prospect of a demand recovery and were up nearly 4% this week, maintaining their position at two-year highs.
