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Gold prices edged higher in Asian trade on Thursday, hovering near record highs as traders speculated that the yellow metal will continue to benefit from a lower interest rate environment. However, expectations of a significant interest rate cut by the Federal Reserve were dampened by a higher-than-expected core consumer price index (CPI) inflation reading for August. This prompted traders to anticipate a smaller, 25 basis point cut, which bolstered the dollar and curbed gold’s advance.
- Spot gold rose 0.2% to $2,516.88 per ounce, while gold futures for December delivery gained 0.1% to $2,544.55 by 00:36 ET (04:36 GMT).
- Despite this, gold remained just below its all-time high of $2,532.05 per ounce, a level it neared earlier this week. Increased demand for safe-haven assets, driven by fears of a U.S. recession, contributed to the yellow metal’s recent gains.
While inflationary pressure reduced expectations of a sharp rate cut, the prospect of a lower interest rate environment still bodes well for gold and other non-yielding assets, as it reduces the opportunity cost of holding such investments.
Other Precious Metals
- Platinum futures rose 0.4% to $961.85 per ounce.
- Silver futures also climbed 0.4% to $29.047 per ounce.
Copper Gains Amid Chinese Stimulus Hopes
In industrial metals, copper prices rebounded slightly on Thursday, recovering from recent declines as weak economic data from China raised hopes of further stimulus measures from the country, which is the world’s largest copper importer.
- Benchmark copper futures on the London Metal Exchange rose 0.4% to $9,180.0 per ton, while one-month copper futures increased by 0.3% to $4.180 per pound.
Recent reports showed that China’s copper imports fell for the third consecutive month, stoking fears of reduced demand. However, this also sparked expectations that the Chinese government may introduce additional measures, such as interest rate cuts and mortgage refinancing, to stimulate its economy and boost local demand for copper.
