July 26 2024: Gold prices increased in Asian trading on Friday but continued to suffer steep weekly losses as traders leaned towards the dollar, anticipating more interest rate cues in the coming days.
After hitting record highs in July, the yellow metal experienced a significant drop due to profit-taking and market volatility.
Spot gold rose 0.3% to $2,371.23 an ounce, while gold futures for August delivery increased by 0.7% to $2,369.90 an ounce by 00:43 ET (04:43 GMT).
Gold Poised for Weekly Loss with PCE Data and Fed Meeting Ahead
Spot gold prices were down 1.2% for the week, having initially dropped further on Thursday following stronger-than-expected U.S. second-quarter GDP data.
The positive GDP reading boosted hopes for a soft landing for the U.S. economy, potentially reducing safe haven demand for gold.
Despite this, traders largely maintained expectations for a Federal Reserve rate cut in September. The upcoming PCE price index data, the Fed’s preferred inflation measure, is expected to influence the outlook on interest rates.
The PCE reading is anticipated to show a slight easing in inflation for June. This data comes just days before a Fed meeting, where the central bank is widely expected to keep rates steady and signal a potential rate cut in September.
Lower interest rates are favorable for gold and other precious metals because they reduce the opportunity cost of holding non-yielding assets.
Gold may also see increased safe haven demand as the U.S. presidential race intensifies, with recent polls indicating a close contest between Republican nominee Donald Trump and Democratic frontrunner Kamala Harris.
Mixed Performance for Other Precious Metals
On Friday, other precious metals showed mixed performance but also faced significant weekly losses. Platinum futures rose 0.4% to $948.0 an ounce, while silver futures fell 0.3% to $27.890 an ounce. Platinum was down 2.7% for the week, and silver experienced a nearly 5% slump.
Copper Stabilizes but Heads for Third Consecutive Weekly Loss
Among industrial metals, copper prices stabilized on Friday but were set for a third straight week of declines due to ongoing concerns over weak demand, particularly from top importer China.
Benchmark copper futures on the London Metal Exchange held steady at $9,123.50 a tonne, while one-month copper futures rose 0.2% to $4.1250 a pound. Both contracts were down 2% and 2.6%, respectively, for the week.
Copper saw some relief from the strong U.S. GDP data and a series of unexpected interest rate cuts in China, which helped to slow its decline.