Oct 11 2024: Gold prices climbed in Asian trading on Friday, building on overnight gains as strong U.S. inflation data was tempered by weaker labor market figures.
In the industrial metals market, copper prices surged sharply, driven by anticipation of further fiscal stimulus signals from China.
Broader metal markets were supported by a dip in the dollar, which pulled back from two-month highs as traders continued to expect that the Federal Reserve will cut interest rates in the coming months, albeit more gradually. Despite the gains, gold remained below recent highs.
Spot gold increased by 1.4% to $2,645.6 per ounce, while December gold futures also rose 1.4% to $2,662.50 per ounce by 00:41 ET (04:41 GMT).
Gold Set for Modest Weekly Decline Amid Rate Cut Speculation Despite the rise, gold is on track to finish the week slightly lower, as markets anticipate smaller interest rate cuts by the Federal Reserve in the near term.
Thursday’s Consumer Price Index (CPI) inflation data supported this expectation, but its impact was somewhat softened by a larger-than-expected increase in weekly jobless claims.
The U.S. dollar retreated from its two-month high following the jobless claims data, as a weaker labor market may prompt the Fed to reduce rates.
CME Fedwatch showed traders pricing in an 81% chance of a 25 basis point rate cut in November. While rate cuts may happen at a slower pace, lower interest rates are generally positive for gold and other non-yielding assets, as they lower the opportunity cost of holding them.
Other precious metals also gained on Friday, recovering a significant portion of recent losses. Platinum futures rose 3.2% to $987.85 per ounce, while silver futures increased 2.9% to $31.558 per ounce.
Copper Rallies as China Stimulus Anticipation Grows Benchmark copper futures on the London Metal Exchange rose 0.9% to $9,772.50 per ton, while December copper futures gained 1.3% to $4.4562 per pound.
Copper’s rally followed steep losses earlier in the week, which were triggered by lackluster signals on stimulus from China, the world’s top copper importer.
China’s finance ministry is set to hold a press briefing on Saturday to announce plans for additional fiscal stimulus. Analysts expect at least 2 trillion yuan ($283 billion) in measures, with a focus on boosting private consumption.
