Gold Prices Update

Gold prices fell slightly in Asian trade on Friday but remained near record highs as markets awaited U.S. inflation data for cues on interest rates.

Despite the slight decline, bullion prices are set for significant gains in August, fueled by safe haven demand and expectations of interest rate cuts, positioning the yellow metal at record levels.

As of 01:08 ET (05:08 GMT), spot gold decreased by 0.3% to $2,514.55 an ounce, while December gold futures dropped 0.5% to $2,547.80 an ounce.

Strong August Performance

Spot prices are poised to gain about 2.8% in August, having earlier achieved a record high of $2,531.72 an ounce. Tensions in the Middle East have amplified safe haven demand, alongside a downturn in risk-driven markets at the month’s start. Additionally, steady buying from central banks in emerging markets has supported prices. The most substantial support for gold derives from expectations of declining U.S. interest rates, creating a more favorable investment landscape.

The focus is now on the PCE price index data, the Federal Reserve’s preferred inflation measure, due later Friday. Analysts anticipate that inflation remained sticky in July, along with signs of resilience in the U.S. economy, could lessen the Fed’s need for sharp interest rate cuts. Consequently, the dollar firmed up in response and is on track for a weekly gain.

Despite this, traders are still factoring in at least a 25 basis point cut in September, according to CME Fedwatch.

Precious Metals Update

In other precious metals trading, platinum and silver showed mixed results on Friday but lagged significantly behind gold throughout August.

Copper Prices Rise on China Stimulus

Among industrial metals, copper prices advanced on Friday, buoyed by reports of additional stimulus measures in China, the top copper importer. Benchmark copper futures on the London Metal Exchange increased by 0.5% to $9,324.50 a ton, while one-month copper futures climbed 0.8% to $4.2447 a pound.

Media reports suggest that Beijing considers refinancing about $5.4 trillion in mortgages, likely providing a much-needed boost to China’s struggling property market. As the property market is a major source of copper demand in China, concerns over slowing demand for copper persist due to the sector’s downturn.