Investing.com — Gold prices held steady in Asian trading on Thursday after rising near record highs in the previous session after the Federal Reserve flagged the possibility of a September interest rate cut.
The yellow metal also saw demand for safe havens increase amid heightened concerns of a wider war in the Middle East following the assassination of Hamas leader Ismail Haniyeh in Tehran.
was flat at $2,446.41 per ounce, while the December expiration rose 0.7% to $2,490.15 per ounce at 01:26 ET (05:26 GMT).
Interest rate cuts hope to stimulate the gold price
Bullion prices rose sharply on Wednesday, closing in on a record high of $2,483.78 an ounce after the Fed, as widely expected.
But Fed Chairman Jerome Powell signaled more progress toward lower inflation and a cooling labor market, explicitly raising the possibility of a rate cut in September on more encouraging data.
Although the Fed still has some more inflation and labor market data to contend with before its next meeting, markets saw almost all of a 25 basis point cut in September.
Lower interest rates are a good sign for gold as they reduce the opportunity cost of investing in non-yielding assets. The focus this week is also on the most important data for July, which will be released on Friday.
Other precious metals were mixed, but retained most of their gains from Wednesday. fell 0.2% to $984.40 per ounce, while rising 0.5% to $29.070 per ounce.
The copper revival stalls after more negative figures about China
However, industrial metals performed less favorably than their peers, with the recovery in copper prices stalling following weaker economic signals from top copper importer China.
The benchmark on the London Metal Exchange rose 0.2% to $9,243.50 per tonne, while the index fell 0.3% in one month to $4.1833 per pound.
Purchasing Managers Index data from China pointed to a broad slowdown in industrial activity. data showed an unexpected contraction in the sector through July, in line with Wednesday’s contraction.
The Caixin data was a sore point for sentiment towards China, as the figures generally painted a more favorable picture of the economy than the government’s PMI.
Copper prices recovered from five-month lows on Wednesday after some encouraging comments from Beijing, while weak PMI data also raised hopes for more stimulus. But Thursday’s reading showed that the government would likely have to do much more to support the economy.
