Dec 12 2024: Gold prices slipped in Asian trading on Thursday, retreating from a two-week high as investors assessed the impact of U.S. inflation data on Federal Reserve rate decisions. Meanwhile, copper prices advanced, buoyed by optimism surrounding potential economic stimulus in China, the world’s largest metals consumer.
Gold Slides Amid Mixed Market Sentiment
Spot gold edged down 0.1% to $2,715.14 an ounce, while February gold futures declined 0.3% to $2,747.61 an ounce as of 23:35 ET (04:35 GMT).
Gold initially benefited from safe-haven demand earlier this week, driven by geopolitical tensions in the Middle East and Asia. However, its gains were tempered by a resilient U.S. dollar and improved risk appetite following the release of U.S. consumer price index (CPI) data.
U.S. Inflation Data Reinforces Rate Cut Bets
In-line CPI data bolstered expectations for a 25-basis-point Federal Reserve rate cut next week, with market bets now at 98%, according to CME FedWatch. However, inflation’s strongest reading in seven months raised doubts about the pace of future rate cuts, supporting the dollar and limiting gold’s upside.
Investors are now eyeing producer price index data due later on Thursday, as well as the Federal Reserve’s year-end meeting, where further clues on 2025 monetary policy may emerge.
Other precious metals showed mixed performance:
- Platinum futures rose 0.6% to $956.45 an ounce.
- Silver futures steadied at $32.955 an ounce.
Copper Advances on China Stimulus Hopes
Copper prices climbed for the third consecutive session, driven by expectations of further economic support from China.
- Benchmark copper futures on the London Metal Exchange gained 0.8% to $9,251.0 per ton.
- February copper futures rose nearly 1% to $4.3033 per pound, reaching a one-month high.
Market optimism grew after China’s Politburo signaled a dovish stance on monetary policy, reinforcing expectations for targeted fiscal measures to boost economic growth. The conclusion of the Central Economic Work Conference later on Thursday is expected to offer further insights into China’s economic agenda for 2025.
The combination of China’s stimulus measures and robust import data continues to support demand prospects for industrial metals, with copper positioned as a key beneficiary.
