Gold Near Record Highs as Softer Yields, Central Bank Rate Cuts Support Prices

Gold prices rose slightly in Asian trading on Thursday, staying close to record highs despite a strong U.S. dollar fueled by speculation of a second Trump presidency. The rise in gold was supported by lower Treasury yields and expectations of interest rate cuts from major central banks.

Spot gold climbed 0.2% to $2,678.90 an ounce, while gold futures for December increased by 0.1% to $2,694.40 an ounce. This continued strength in gold brought it close to the record high of $2,685.96 an ounce reached on Wednesday.

Gold Supported by Lower Yields, Rate Cut Watch

The decline in U.S. Treasury yields, with the 10-year rate falling 0.5% on Wednesday, provided support to gold. This came amid increasing speculation of a potential second term for Donald Trump. Betting markets showed Trump gaining ground, although recent polls put Vice President Kamala Harris slightly ahead. With just three weeks left before the election, markets are bracing for a tight race.

Trump’s policies are expected to be inflationary, which put pressure on Treasury yields while boosting the U.S. dollar to its strongest level since early August. Meanwhile, markets were also focused on upcoming interest rate cuts by major central banks, with the European Central Bank widely expected to lower rates by 25 basis points later on Thursday.

Among other precious metals, platinum futures rose 0.5% to $1,012.40 an ounce, while silver futures dipped 0.7% to $31.760 an ounce.

Copper Prices Slide as China’s Property Stimulus Disappoints

Industrial metals, particularly copper, faced renewed pressure after a lackluster Chinese government briefing on economic support measures. Benchmark copper futures on the London Metal Exchange dropped 0.6% to $9,548.50 a ton, while December copper futures fell by the same margin to $4.3445 a pound.

China’s latest efforts to bolster its property sector, including expanding a list of developers eligible for government funding, failed to impress investors. The absence of significant new measures and scant details on implementation led to continued disappointment.

This underwhelming response marked the latest in a series of Chinese stimulus briefings that have failed to provide the hoped-for boost to metals markets. Copper, heavily reliant on demand from China, has been hit by steep losses over the past week as concerns over China’s economic outlook persist. Investors are now awaiting China’s third-quarter GDP data, due on Friday, for further economic cues.