Gold Prices Rise Amid Cooling U.S. Economy and Rate Cut Expectations
Factors Driving Gold Prices
Gold prices in Asian trade experienced an uptick on Friday as indications of a cooling U.S. economy prompted some demand for the precious metal. However, gains were tempered by anticipation of further cues regarding rate cuts from key inflation data.
Current Gold Prices
Spot gold saw a 0.2% increase, reaching $2,335.86 per ounce, while gold futures expiring in June rose by a similar margin to $2,335.68 per ounce by 01:00 ET (05:00 GMT).
Weekly Performance
Gold prices were on track for significant weekly losses after a decline from near-record highs observed over the past five sessions. Traders largely adjusted their expectations for early U.S. interest rate cuts, contributing to the downward trend.
Impact of Economic Data
The dollar's decline, influenced by softer-than-expected gross domestic product (GDP) data, provided some relief to bullion prices. However, this relief was limited as a stronger GDP price index led traders to further recalibrate their expectations of interest rate cuts by the Federal Reserve.
Focus on PCE Data
The upcoming Personal Consumption Expenditures (PCE) price index data garnered attention as the Fed's preferred inflation gauge. The outcome of this data is likely to influence the central bank's outlook, particularly regarding monetary policy decisions.
Pressure on Gold
Gold faced pressure from multiple factors, including a decrease in the risk premium over unrest in the Middle East and diminishing expectations of Fed rate cuts. Traders now anticipate rate cuts beginning no earlier than September or the fourth quarter, according to the CME Fedwatch tool.
Performance of Other Precious Metals
While gold prices rose, platinum futures increased by 0.6% to $931.25 per ounce, and silver futures saw a 0.9% rise to $27.60 per ounce. However, these metals also nursed steep losses for the week.
Copper Prices Rebound Amid Weaker Dollar and Market Developments
Industrial Metals Performance
Copper prices surged to two-year highs, benefiting from a weaker dollar. Three-month copper futures on the London Metal Exchange rose by 0.8% to $9,983.50 per ton, while one-month copper futures increased by 0.7% to $4.5745 per pound.
Market Focus
Attention turned to a substantial bid by BHP Group Ltd for smaller copper miner Anglo American PLC, potentially creating the world's largest copper miner. However, reports indicated that Anglo's board was largely dismissive of the offer. Additionally, Chinese copper refiners signaled production cuts, and stricter Western sanctions on Russian metal exports hinted at tighter markets ahead.
