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Gold prices advance, rate cuts in focus as CPI data looms

Published 07/11/2024, 01:01 AM
© Reuters

Investing.com-- Gold prices rose in Asian trade on Thursday, benefiting from weakness in the dollar and Treasury yields as speculation over U.S. interest rate cuts grew ahead of key inflation data. 

The yellow metal was sitting on some gains this week, buoyed by reports that several central banks in emerging markets were stocking up on the yellow metal. Dovish-leaning comments from Federal Reserve Chair Jerome Powell also furthered the yellow metal’s advance. 

Spot gold rose 0.4% to $2,381.73 an ounce, while gold futures expiring in August rose 0.3% to $2,386.75 an ounce by 00:42 ET (04:42 GMT). 

Gold buoyant as Powell comments put CPI data in focus 

The yellow metal was trading less than $100 below a record high, as Powell flagged progress towards bringing down inflation in recent months.

The Fed Chair also said that the central bank did not need inflation to necessarily fall below its 2% target to begin cutting rates, although the bank still needed more confidence that inflation was easing. 

Powell’s comments saw traders largely maintain their bets on a September rate cut. The CME Fedwatch tool showed traders pricing in a 72.5% chance for a 25 basis point cut in September.

Powell’s comments dented the dollar, and saw focus turn squarely towards upcoming consumer price index data, due later on Thursday. The reading is widely expected to show slight cooling in inflation.

Other precious metals were mixed on Thursday, but were sitting on some gains this week. Platinum futures fell 0.2% to $1,005.25 an ounce, while silver futures rose 0.9% to $31.290 an ounce, with the latter having largely outpaced gold in recent months.

Still, analysts at TD securities noted that gold was likely to rise in the near-term as more central bank buying in emerging markets and increased clarity on U.S. interest rate cuts benefited the yellow metal. 

Copper rises on softer dollar, more China cues awaited 

Among industrial metals, copper prices rose on Thursday, also benefiting from a softer dollar. But the red metal was nursing steep losses in recent sessions, following middling economic data from top importer China.

Benchmark copper futures on the London Metal Exchange rose 0.1% to $9,914.50 a tonne, while one-month copper futures rose 0.5% to $4.6147 a pound.

Copper sank this week as inflation data from China largely underwhelmed markets, and raised concerns over a slowing economic rebound in the country. Trade data from China, due on Friday, was now awaited for more cues on the country. 


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