Investing.com — Gold prices rose in Asian trading on Friday as signs of a cooling U.S. economy fueled demand for the yellow metal, although gains were limited ahead of more rate cuts from key inflation data.
The yellow metal was also set for steep weekly losses after falling from near record highs over the past five sessions as traders largely priced in expectations for early US rate cuts.
rose 0.2% to $2,335.86 per ounce, while the June term rose 0.2% to $2,335.68 per ounce at 01:00 ET (05:00 GMT).
Precious metal prices saw some relief after the decline, which was softer than expected. But this relief was limited as a stronger trader further priced in expectations of Federal Reserve rate cuts.
Gold is on track for weekly losses as PCE data emerges
Spot prices are expected to fall 2% this week as they continue a decline from record highs reached earlier in April. Prices had reached record highs of about $2,430 an ounce.
A major point of pressure on gold was the lower risk premium compared to the unrest in the Middle East, because a war between Iran and Israel did not occur.
But the biggest source of losses for gold has been declining expectations that the Fed will cut rates. Stock traders did not expect the Fed to start cutting rates until September or the fourth quarter.
This brought the upcoming data into full focus. This outcome is the Fed’s favorite inflation gauge and will likely play a role in the central bank’s outlook.
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Higher rates for longer periods of time do not bode well for gold as they increase the opportunity cost of investing in the yellow metal.
Other precious metals advanced on Friday but also posted steep losses this week. rose 0.6% to $931.25 per ounce, while it rose 0.9% to $27.60 per ounce.
Copper prices bounce back to two-year highs, BHP-Anglo deal watched
Among industrial metals, copper prices benefited from a weaker dollar and recovered to a two-year high.
on the London Metal Exchange rose 0.8% to $9,983.50 a tonne, while it rose 0.7% to $4.5745 a pound.
The focus has now been on a nearly $39 billion bid from top miner BHP Group Ltd (ASX:) for smaller copper miner Anglo-American PLC (LON:), which could potentially create the world’s largest copper miner. But reports indicated that Anglo’s board largely rejected the offer.
The prospect of tighter markets continued to play a role after Chinese copper refiners announced production cuts. Stricter Western sanctions on Russian metal exports also heralded tighter markets.
