Gold prices inched higher in Asian trade on Friday, rebounding from a recent dip after hitting record highs earlier in the week. The surge in prices was driven by expectations of an interest rate cut by the Federal Reserve, with investors eagerly awaiting an address by Fed Chair Jerome Powell later in the day.
Spot gold rose 0.4% to $2,495.52 an ounce, while gold futures for December delivery gained 0.6% to $2,530.70 an ounce. Despite a slight pullback from its record high, gold remained well-supported as investors bet on lower interest rates in the near future.
Speculation of a rate cut has been fueled by soft labor data released earlier in the week, which showed a downward revision in payrolls data. This, coupled with concerns over a slowing U.S. economy, has increased the likelihood of a rate cut in September.
Lower interest rates tend to benefit gold, as the precious metal is seen as a safe haven asset. Additionally, lower rates reduce the opportunity cost of holding gold, making it more attractive to investors.
Other precious metals also saw gains on Friday, with silver rising 0.7% to $959.75 an ounce and platinum climbing 0.9% to $29.290 an ounce. Industrial metal copper also rose, set for a second consecutive week of gains as it rebounded from recent lows.
Copper Prices Rise on Improved Sentiment and Expectations of Increased Demand
Copper prices saw a rebound on Friday, with benchmark prices on the London Metal Exchange rising 0.8% to $9,204.50 a ton. The optimism in the copper market is driven by bargain buying and improving sentiment towards top importer China.
Markets are also betting that lower U.S. interest rates will help boost global copper demand, further supporting the price of the industrial metal.
Overall, the outlook for gold and copper remains positive, with both metals expected to benefit from the current economic environment and market conditions. Investors should keep a close eye on upcoming developments, particularly any announcements from the Federal Reserve regarding interest rates, as they could have a significant impact on the prices of these metals.
