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Gold prices continued to rise in Asian trade on Friday, building on overnight gains as stronger-than-expected U.S. inflation data was balanced by weaker labor market figures. This dynamic helped boost broader metal markets, with copper and other industrial metals benefiting from the softer dollar and anticipation of fiscal stimulus cues from China.
Gold Holds Gains Amid Fed Rate Cut Speculation
Spot gold climbed 1.4% to $2,645.60 an ounce, while December gold futures also rose 1.4% to $2,662.50 an ounce by 00:41 ET (04:41 GMT). Despite these gains, gold prices are poised to end the week slightly lower as investors weigh the possibility of smaller Federal Reserve rate cuts in the coming months.
Thursday’s Consumer Price Index (CPI) report indicated persistent inflationary pressure, but this was tempered by a soft labor market, with jobless claims rising more than expected. The combination of these factors led to renewed expectations for a 25 basis point rate cut in November, with traders pricing in an 81% chance according to the CME FedWatch Tool.
While the Fed is likely to slow its pace of rate cuts, reduced rates still favor gold, which benefits from lower opportunity costs compared to other non-yielding assets.
Other Precious Metals Rally
Broader precious metals also experienced sharp gains, recovering from recent losses. Platinum futures surged 3.2% to $987.85 an ounce, while silver futures rose 2.9% to $31.558 an ounce, buoyed by the weakened dollar and favorable market sentiment.
Copper Prices Rise on China Stimulus Hopes
In the industrial metals sector, copper prices saw sharp gains as markets awaited further announcements from China on potential fiscal stimulus measures aimed at supporting economic growth. Copper, heavily influenced by demand from China, rose in response to speculation over the country’s next economic moves.
The dollar’s pullback from two-month highs has contributed to the overall strength in metal prices, as a weaker dollar makes commodities priced in the currency more attractive to international buyers.
