Gold Prices Steady Amid Rate Cut Hopes
Gold prices steadied in Asian trade on Thursday after nearing record highs in the prior session. This surge followed the Federal Reserve’s signals about a possible interest rate cut in September.
The yellow metal benefited from increased safe haven demand due to rising concerns over escalating conflict in the Middle East, particularly after the killing of Hamas leader Ismail Haniyeh in Tehran.
Current Gold Prices
- Spot gold steadied at $2,446.41 per ounce.
- Gold futures for December increased by 0.7% to $2,490.15 per ounce as of 01:26 ET (05:26 GMT).
Rate Cut Prospects Lift Gold Prices
On Wednesday, bullion prices rose sharply, nearing a record high of $2,483.78 per ounce after the Fed kept interest rates steady. Fed Chair Jerome Powell noted progress towards lower inflation and a cooling labor market, hinting at a potential September rate cut based on upcoming data.
Markets are now largely anticipating a 25 basis point cut in September, which traditionally benefits gold, as lower rates decrease the opportunity cost of holding non-yielding assets. Attention is also on Friday’s nonfarm payrolls data for July.
Performance of Other Precious Metals
Other precious metals showed mixed results but retained most of their Wednesday gains. Platinum futures dipped 0.2% to $984.40 an ounce, while silver futures rose 0.5% to $29.070 an ounce.
Copper Faces Challenges on Weak China Data
Industrial metals did not perform as well, with a rebound in copper prices stalling due to negative economic signals from China, the largest copper importer.
- Benchmark copper futures on the London Metal Exchange rose 0.2% to $9,243.50 per tonne.
- One-month copper futures fell 0.3% to $4.1833 per pound.
Recent purchasing managers index (PMI) data from China indicated a slowdown in manufacturing activity. The Caixin manufacturing PMI reflected an unexpected contraction in July, aligning with government readings.
The Caixin data raised concerns as it typically presents a more optimistic view of the economy than government statistics. Despite copper’s rebound from five-month lows earlier in the week, the weak PMI data heightened the expectation for significant government stimulus measures to support the economy.
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