Fed’s Rate Cut Speculations Boost Gold Prices to Record Highs
Gold prices held steady in Asian trading on Thursday. This comes after a sharp rise near record highs in the previous session. The Federal Reserve’s hint at a possible interest rate cut in September fueled this surge. The yellow metal’s safe haven demand also increased. This was due to escalating tensions in the Middle East, following the killing of Hamas leader Ismail Haniyeh in Tehran. Gold prices record highs remain a focal point for investors.
Spot and Futures Gold Performance Near High Record
Spot gold prices steadied at $2,446.41 an ounce. Meanwhile, gold futures for December rose by 0.7% to $2,490.15 an ounce. These figures reflect the market’s reaction to the Fed’s steady interest rates. Jerome Powell, the Fed Chair, mentioned progress towards lower inflation and a cooling labor market. He also hinted at a potential rate cut in September, should the data be encouraging.
Market Expectations and Economic Indicators for Gold Prices
The market is almost fully pricing in a 25 basis point cut in September, according to CME Fedwatch. Lower interest rates tend to benefit gold prices, as they decrease the opportunity cost of holding non-yielding assets. This week’s focus is also on the key nonfarm payrolls data for July, set to be released on Friday.
Mixed Performance in Other Precious Metals
Other precious metals showed mixed performances. Platinum futures dropped by 0.2% to $984.40 an ounce. However, silver futures rose by 0.5% to $29.070 an ounce. These movements show the varied responses within the precious metals market.
Industrial Metals and China’s Economic Data Impact Gold and Copper Prices
Industrial metals, particularly copper, had less favorable performances. Copper prices rebounded but stalled due to weak economic signals from China. Benchmark copper futures on the London Metal Exchange rose by 0.2% to $9,243.50 a tonne. However, one-month copper futures fell by 0.3% to $4.1833 a pound. China’s Purchasing Managers Index (PMI) data indicated a slowdown in manufacturing activity, affecting market sentiment.
The Caixin manufacturing PMI data showed an unexpected contraction in July. This aligns with the government’s reading from Wednesday. Despite some encouraging comments from Beijing, Thursday’s data suggests the need for more substantial support to bolster the economy. Investors continue to watch gold prices record highs as market conditions evolve.
