July 25 2024: Gold prices declined during Asian trade on Thursday, experiencing minimal safe haven demand despite heightened risk-off sentiment. Traders favored the Japanese yen, which saw a sharp appreciation. Meanwhile, the broader commodity market faced significant downturns, with copper prices hitting a near four-month low amid ongoing concerns over demand from top importer China.
Gold Prices Retreat Amid Yen’s Strength and Rate Hike Speculation:
- Spot gold slid 0.9% to $2,376.11 an ounce.
- Gold futures for August delivery tumbled 1.7% to $2,375.40 an ounce by 00:52 ET (04:52 GMT).
- The Japanese yen’s USD/JPY pair dropped to a two-month low on Thursday, benefiting from an unwinding of short positions and speculation over a potential Bank of Japan interest rate hike.
- Traders’ pivot to the yen diminished gold’s appeal as a safe haven, even as global markets saw a sharp decline in risk appetite.
- The dollar also retreated ahead of key U.S. economic data, including second-quarter GDP and the PCE price index, the Federal Reserve’s preferred inflation gauge, which could impact future rate hike decisions.
Other Precious Metals:
- Platinum futures fell 1.1% to $949.60 an ounce.
- Silver futures tumbled 4.2% to $28.098 an ounce, reversing much of their recent gains.
Copper Losses Deepen Amid Demand Concerns:
- Benchmark copper futures on the London Metal Exchange slid 1.6% to $8,960.50 a tonne, breaking below $9,000 for the first time since early April.
- One-month copper futures fell 0.6% to $4.0540 a pound.
- Persistent concerns over demand from China, exacerbated by underwhelming economic data, contributed to copper’s decline.
- Weak manufacturing activity data from the U.S., Japan, and Germany further indicated a slowdown in industrial activity, intensifying worries about global copper demand.
Overall, gold and other metal markets struggled despite a weaker dollar, as traders gravitated towards the yen amid rising speculation of monetary policy changes in Japan and continuing uncertainty in major economies.
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