July 11 2024: Gold prices rose in Asian trading on Thursday, benefiting from a weaker dollar and declining Treasury yields as speculation over U.S. interest rate cuts grew ahead of key inflation data.
The yellow metal has gained this week, buoyed by reports that several central banks in emerging markets are increasing their gold reserves. Dovish comments from Federal Reserve Chair Jerome Powell also supported the metal’s advance.
Spot gold rose 0.4% to $2,381.73 an ounce, while gold futures expiring in August increased 0.3% to $2,386.75 an ounce by 00:42 ET (04:42 GMT).
Gold Buoyant as Powell Comments Highlight CPI Data
Gold is trading less than $100 below its record high, as Powell highlighted recent progress in reducing inflation. The Fed Chair indicated that the central bank might not need inflation to fall below its 2% target before starting to cut rates, although more confidence in the easing of inflation is required.
Powell’s comments led traders to largely maintain their bets on a September rate cut. The CME Fedwatch tool showed a 72.5% chance for a 25 basis point cut in September.
These remarks weakened the dollar, shifting focus towards the upcoming consumer price index (CPI) data due later on Thursday, which is expected to show a slight cooling in inflation.
Other precious metals showed mixed performance on Thursday but have seen gains this week. Platinum futures fell 0.2% to $1,005.25 an ounce, while silver futures rose 0.9% to $31.290 an ounce, with silver having outpaced gold in recent months.
Analysts at TD Securities noted that gold is likely to rise in the near term due to increased central bank buying in emerging markets and greater clarity on U.S. interest rate cuts.
Copper Rises on Softer Dollar; More China Cues Awaited
Among industrial metals, copper prices rose on Thursday, also benefiting from a softer dollar. However, the red metal has experienced steep losses in recent sessions following middling economic data from top importer China.
Benchmark copper futures on the London Metal Exchange rose 0.1% to $9,914.50 a tonne, while one-month copper futures increased 0.5% to $4.6147 a pound.
Copper declined this week as inflation data from China largely underwhelmed markets, raising concerns about a slowing economic rebound in the country. Traders are now awaiting trade data from China, due on Friday, for further cues on the country’s economic health.
