Gold prices fell during Asian trading on Thursday, experiencing reduced safe haven demand despite rising risk-off sentiment. The drop in gold prices coincided with a sharp appreciation of the Japanese yen, which saw a significant rebound.
In broader commodity markets, copper prices extended their decline, hitting a near four-month low amid ongoing concerns about China, the world’s largest importer of the metal. Weak manufacturing data from the U.S., Germany, and Japan further dampened copper’s outlook.
Spot gold decreased by 0.9% to $2,376.11 per ounce, while August gold futures fell 1.7% to $2,375.40 per ounce by 00:52 ET (04:52 GMT).
Gold’s Safe Haven Appeal Diminishes as Yen Strengthens
Despite global markets showing reduced risk appetite, gold has struggled to attract safe haven interest. Traders have been shifting focus to the Japanese yen, which saw its USDJPY exchange rate drop to a more than two-month low on Thursday.
The yen’s strength was bolstered by the unwinding of short positions over the past week, likely influenced by suspected intervention in the currency market by Tokyo. Additionally, speculation about a potential interest rate hike by the Bank of Japan next week has supported the yen, given recent signs of resilience in the Japanese economy.
Gold and other metals failed to capitalize on the weaker dollar, which had retreated ahead of key upcoming U.S. economic reports. The U.S. Gross Domestic Product (GDP) data for the second quarter is expected later on Thursday, and the PCE price index, the Federal Reserve’s preferred measure of inflation, will be released on Friday.
Other Precious Metals Retreat
Other precious metals also saw declines. Platinum futures fell 1.1% to $949.60 per ounce, while silver futures dropped 4.2% to $28.098 per ounce, erasing much of their recent gains.
