Gold prices in Asian markets surged close to record highs due to subdued U.S. consumer inflation data, prompting expectations of Federal Reserve rate adjustments. This surge was tempered by an increase in risk appetite, with traders positioning for a potentially smaller rate cut in September following a rise in the consumer price index inflation.
Spot gold rose by 0.2% to $2,452.56 per ounce, while gold futures saw a 0.4% increase, reaching $2,490.40 an ounce by 01:05 ET (05:05 GMT).
The demand for gold as a safe-haven asset was bolstered by escalating geopolitical tensions in the Middle East, propelling spot gold prices to nearly surpass the $2,480 mark earlier this week. Despite an initial negative reaction to the CPI data, which indicated a monthly inflation increase, traders leaned towards a modest 25 basis point cut by the Fed in September, as reflected by CME Fedwatch.
The positive outlook for gold persists due to expectations of lower interest rates, which reduce the opportunity cost of investing in the precious metal. This has kept gold trading near recent peaks, with a decline in the dollar and Treasury yields further supporting its performance.
In addition to gold, other precious metals also experienced gains on Thursday. Platinum futures rose by 0.5% to $935.65 per ounce, while silver futures surged by 1.6% to $27.773 per ounce.
On the industrial metals front, copper prices rose on Thursday, supported by positive economic indicators from China, the top copper importer globally. Despite recent losses, benchmark copper futures on the London Metal Exchange increased by 0.5% to $8,991.50 per ton, and one-month copper futures rose by 0.5% to $4.065 per pound.
While some improvements were seen in consumer spending based on Chinese data, concerns lingered over industrial production, a key driver of copper demand in China. Notably, recent reports indicated a decline in China’s copper imports for two consecutive months, raising concerns about slowing demand in the country.
