Investing.com — Gold prices fell sharply in Asian trading on Friday, hit by a mix of profit-taking and speculation about a possible Donald Trump presidency and tougher US trade policies favoring the dollar.
Among industrial metals, copper prices held steady on Friday but posted steep losses amid little signals of more stimulus from top importer China as the country struggles with slowing economic growth.
fell 0.9% to $2,423.89 per ounce, while the maturity expiring in August fell 1.2% to $2,426.45 per ounce 01:05 ET (05:05 GMT).
Gold plummets from record highs
Spot prices are now trading about $50 below a record high set earlier this week, experiencing some profit-taking after surging over the past seven days.
Gold’s initial strength was driven by growing optimism about US rate cuts, with traders estimating a more than 90% chance that the Federal Reserve will cut rates by 25 basis points in September.
While these expectations were still in place, the dollar found some strength this week on unexpectedly strong jobless claims data, which showed that the labor market – a key consideration for the Fed moving to cut rates – remained resilient.
Speculation about a second term for Trump — after the former president saw a surge in popularity in the wake of a botched assassination — also benefited the dollar, on bets that Trump’s protectionist policies would bring more capital back into the country can lead.
Other precious metals also fell on Friday, following gold’s decline. fell 0.5% to $976.60 an ounce, while down 1.6% to a two-week low of $29.762 an ounce.
Copper is facing steep losses due to the jitters in China
Copper prices stabilized on Friday but posted steep losses this week due to growing uncertainty over top importer China.
The benchmark on the London Metal Exchange rose 0.3% to $9,411.0 per tonne, while the index rose 0.3% in one month to $4,280 per pound.
Both contracts fell between 4.7% and 7% this week.
Copper’s losses were initially fueled by weaker-than-expected Chinese economic growth data for the second quarter.
Reports that the US was considering tougher trade restrictions against China also hurt sentiment towards the country, as did speculation about a second term for Trump.
Moreover, the Chinese Communist Party’s third plenum, which began earlier this week, yielded few signals of more stimulus from Beijing. Although officials promised to provide more support, they did not provide details of the planned measures.
