Gold prices in Asian trading held firm near a 10-day high on Thursday, supported by growing expectations of interest rate cuts by the Federal Reserve, which weakened the dollar and Treasury yields.
However, gains in gold were tempered by cautious sentiment following hawkish signals from the Fed’s June meeting minutes and ahead of key nonfarm payrolls data.
At 00:27 ET (04:27 GMT), spot gold edged up 0.1% to $2,359.56 per ounce, while August gold futures slipped 0.1% to $2,367.15 per ounce.
The yellow metal had surged on Wednesday, correlating with a sharp decline in the dollar as traders increasingly priced in a rate cut by the Fed in September. This sentiment was bolstered by weaker-than-expected ADP employment data and soft non-manufacturing activity figures, suggesting a potential slowdown in the U.S. economy.
According to the CME Fedwatch tool, traders now see a more than 68% probability of a 25 basis point rate cut in September, up from 59% previously.
Lower interest rates are generally favorable for non-yielding assets like gold, as they reduce the attractiveness of Treasuries and the dollar. Despite this, optimism surrounding rate cuts was tempered by the Fed’s cautious stance on reducing borrowing costs, as indicated in the meeting minutes.
Investors remained cautious ahead of the release of key nonfarm payrolls data, which has consistently exceeded expectations in recent months. Improved risk appetite also led traders to favor assets such as stocks and currencies over gold.
In other precious metals, platinum futures rose 0.7% to $1,019.40 per ounce, while silver futures declined 0.5% to $30.70 per ounce, despite silver significantly outperforming gold over the past year.
Copper Prices Remain Flat Amid Economic Uncertainty
Meanwhile, copper prices showed muted movement amid mixed economic signals. While copper had initially gained on a weaker dollar, its upward momentum was limited by signs of cooling economic activity in the U.S. and sluggish data from China.
On the London Metal Exchange, benchmark copper futures fell 0.2% to $9,849.0 per tonne, with one-month copper futures slipping 0.1% to $4.5255 per pound. Both contracts had seen substantial declines in June amid concerns over Chinese demand and global economic growth prospects.
The outlook for copper remains uncertain, with market sentiment heavily influenced by developments in China, the world’s largest importer of the metal, and broader global economic conditions.
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