Gold Prices Decline Amid Inflation Data

Gold prices fell from a more-than two-week high during Asian trade on Thursday as investors assessed the impact of in-line U.S. consumer inflation data on interest rate forecasts.

Industrial Metals Review

Among industrial metals, copper prices continued to rise, buoyed by optimism regarding potential stimulus measures from top importer China.

Gold has seen some gains this week due to heightened geopolitical tensions in the Middle East and Asia, spurring safe-haven demand. However, overall gains in the metal markets have been tempered by a strong dollar.

Spot gold decreased by 0.1% to $2,715.14 an ounce, while February gold futures fell 0.3% to $2,747.61 an ounce by 23:35 ET (04:35 GMT).

In-line CPI Data and Rate Cut Bets

Gold prices surged in overnight trading as in-line consumer price index (CPI) inflation data prompted traders to increase bets on an upcoming Federal Reserve rate cut. Markets are pricing in a 98% likelihood of a 25 basis point cut, according to CME Fedwatch.

Nevertheless, gains in gold were restricted by improved risk appetite, as Wall Street indexes surged on the anticipation of lower rates in the near future.

The strengthening dollar also limited gold’s upside, as traders preferred the greenback due to rising uncertainty regarding long-term inflation and interest rates outlook. Wednesday’s CPI report indicated inflation at its highest level in seven months, which may keep the Fed cautious about further monetary easing.

Attention is now shifted to producer price index data set for release later on Thursday, just days before the Fed’s final meeting of the year. The central bank's outlook on interest rates will be closely monitored amid increasing speculation of a slower rate-cut pace in 2025.

Performance of Other Precious Metals

Other precious metals exhibited mixed performance after recording gains this week. Platinum futures increased by 0.6% to $956.45 an ounce, while silver futures stabilized at $32.955 an ounce.

Copper Prices Support from China Stimulus

Benchmark copper futures on the London Metal Exchange rose by 0.8% to $9,251.0 a ton, with February copper futures up nearly 1% at $4.3033 a pound. Both contracts achieved a one-month high on Wednesday amid growing optimism for additional stimulus measures from China.

China's Politburo recently signaled its most dovish stance on monetary policy yet to support economic growth, following a high-level government meeting.

The Central Economic Work Conference, which outlines China’s economic agenda for 2025, is set to conclude later on Thursday and may provide further insights into plans for stimulus.