Gold prices extended gains in Asian trading on Friday, buoyed by strong U.S. inflation data despite a softer-than-expected labor market report. Meanwhile, industrial metals like copper surged as markets awaited further announcements on fiscal stimulus from China.
Gold Rises as U.S. Dollar Weakens Gold spot prices climbed 1.4% to $2,645.6 per ounce, while December futures rose 1.4% to $2,662.50 per ounce by early morning trading (00:41 ET/04:41 GMT). Despite the rally, gold remained below recent highs and is set to end the week slightly lower. Markets are now anticipating a slower pace of interest rate cuts from the Federal Reserve.
Thursday’s U.S. consumer price index (CPI) data reinforced expectations of a smaller rate cut. However, this was tempered by a surprise jump in weekly jobless claims, which indicated weakness in the labor market. The resulting dip in the U.S. dollar, which fell from two-month highs, further supported metal prices. Traders are now pricing in an 81% chance of a 25 basis point rate cut by the Fed in November, according to the CME FedWatch tool.
While a slower rate cut pace is expected, lower interest rates remain favorable for non-yielding assets like gold, as they reduce the opportunity cost of holding such assets.
Other Precious Metals Rebound Other precious metals followed gold’s upward trajectory on Friday, recovering from recent losses. Platinum futures jumped 3.2% to $987.85 per ounce, while silver futures surged 2.9% to $31.558 per ounce.
Copper Prices Surge on Hopes of Chinese Stimulus Copper prices also experienced a significant rise, with benchmark futures on the London Metal Exchange increasing 0.9% to $9,772.50 per ton. December copper futures rose 1.3% to $4.4562 per pound.
The rally in copper followed earlier losses this week, driven by weak signals on fiscal stimulus from China, the world’s largest copper consumer. However, investor optimism grew as China’s finance ministry announced a press conference for Saturday, where it is expected to outline new economic support measures.
Analysts predict Beijing will introduce a stimulus package worth at least 2 trillion yuan ($283 billion), with a focus on boosting private consumption and supporting the broader economy.
Gold and copper, along with other key metals, are benefiting from a softer dollar and shifting expectations on monetary policy, with markets closely watching developments in both the U.S. and China.
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