Investing.com — Gold prices rose in Asian trading Thursday, staying near record highs as softer-than-expected U.S. consumer inflation data fueled hopes that the Federal Reserve will cut interest rates.
Gains in the yellow metal were also held back by improved risk appetite, while a monthly rise in inflation positioned traders for a smaller rate cut in September.
rose 0.2% to $2,452.56 per ounce, while it was up 0.4% to $2,490.40 per ounce at 01:05 ET (05:05 GMT).
Gold close to record high, interest rate cut in sight in September
Spot gold prices came close to a record high of over $2,480 this week as demand for safe havens was also boosted by worsening geopolitical tensions in the Middle East.
But gold had initially sparked a negative reaction to CPI data on Wednesday, as a month-on-month rise in inflation showed traders favoring a smaller 25 basis point cut by the Fed in September. The instrument had previously indicated that traders were split between a 25 bp and 50 bp cut, with the latter offering a more favorable outlook for metals markets.
Still, the prospect of lower interest rates bodes well for gold, as lower interest rates lower the opportunity cost of investing in the yellow metal. This left the yellow metal within sight of recent peaks, with losses in the dollar and government bond yields also escalating
Other precious metals also rose on Thursday. rose 0.5% to $935.65 per ounce, while the price rose 1.6% to $27.773 per ounce.
Copper rises despite mixed Chinese data
Among industrial metals, copper prices rose on Thursday amid some positive economic data from top importer China, although the red metal still suffered steep losses in recent sessions.
The benchmark on the London Metal Exchange rose 0.5% to $8,991.50 per tonne, while the benchmark rose 0.5% in one month to $4.065 per pound.
Data from China showed some improvement in consumer spending, with growth in July being stronger than expected.
But – which is a key driver of Chinese copper demand – grew less than expected, as did growth. China’s also rose unexpectedly.
Concerns about slowing Chinese demand caused copper to suffer steep losses last month, especially as recent data also showed Chinese copper imports falling for two consecutive months.
