Gold prices in Asia showed minimal movement on Friday, influenced by a strengthening dollar that offset excitement over a potential decrease in U.S. interest rates. The precious metal, while posting some gains for the week, continued to struggle after a significant drop from its all-time highs due to elevated interest rates.
Spot gold slightly increased by 0.1% to $2,305.23 per ounce, and gold futures expiring in August also rose by 0.1% to $2,320.15 per ounce by 00:56 ET (04:56 GMT). The Federal Reserve’s announcement of a reduction in the number of anticipated interest rate cuts in the coming years, from three to one in 2024, contributed to the decline in gold and other metal prices in recent trading sessions.
Although the yellow metal experienced some gains following lower-than-expected consumer price index data that negatively impacted the dollar, market participants eventually returned to the dollar following the Fed’s revised outlook. The rebound of the dollar was further supported by the release of softer-than-expected producer price index data, while Treasury yields also rebounded from earlier lows in the week.
The expectation of prolonged higher interest rates poses a challenge for gold and other metals as it raises the cost of investing in non-yielding assets. This sentiment maintained the trading of other precious metals within a narrow range on Friday, with platinum futures increasing by 0.3% to $957.80 per ounce, and silver futures declining by 0.2% to $28.992 per ounce. Both metals were on track for modest weekly performances.
Copper prices experienced a modest increase on Friday but struggled through a lackluster week influenced by a stronger dollar. Benchmark copper futures on the London Metal Exchange rose by 0.3% to $9,824.0 per tonne, while one-month copper futures increased by 0.2% to $4.4945 per pound. Market sentiment towards China deteriorated after the European Union imposed tariffs on Chinese electric vehicles, adding pressure on the growing sector and impacting copper demand, as EVs are a major consumer of the metal.
Additionally, escalating trade tensions between major global economies raised worries about a potential rekindling of a trade war, contributing to the subdued performance of metal prices.
