Gold prices in Asian trade surged on Friday, approaching a record high amidst global market turmoil and economic slowdown concerns. This surge in safe-haven buying has propelled the yellow metal to strong price gains this week, fueled by bets on U.S. interest rate cuts and heightened tensions in the Middle East.
Spot gold rose 0.5% to $2,458.49 an ounce, while gold futures for December delivery increased by 0.9% to $2,502.60 an ounce. The precious metal is on track for its best week since March, with a weekly gain of over 3%.
Weak U.S. economic data, including poor purchasing managers index and employment data, have raised worries about a slowdown in the world’s largest economy. This, combined with the Federal Reserve signaling a potential interest rate cut in September, has driven investors to seek safe-haven assets like gold.
Looking ahead, all eyes are on the upcoming nonfarm payrolls data for more insights into the U.S. economy. A cooling labor market further supports the case for Fed rate cuts, which are positive for precious metal prices as they lower the opportunity cost of investing in non-yielding assets.
In contrast, copper prices have struggled this week, facing a fourth consecutive week of losses due to fears of a global economic slowdown impacting demand. Weak PMI readings from the U.S. and China signaling a decline in manufacturing activity have weighed on copper prices.
Despite a slight rebound on Friday, benchmark copper on the London Metal Exchange and one-month copper futures are poised for another week of losses. This indicates ongoing concerns about the impact of economic growth fears on industrial metals.
In summary, gold prices are soaring on safe-haven demand and expectations of U.S. interest rate cuts, while copper prices are facing downward pressure amid global economic growth concerns. Investors should closely monitor economic data and central bank actions for potential market shifts and implications for their investment portfolios.