Gold prices in Asia increased on Thursday due to weak economic data, leading to expectations of interest rate cuts by the Federal Reserve and impacting the dollar. Traders anticipated rate cuts in September by the Fed, following a similar move by the Bank of Canada and expectations for a cut by the European Central Bank. Despite an improvement in broader risk sentiment, spot gold rose 0.6% to $2,370.40 an ounce, while gold futures for August fell 0.6% to $2,389.70 an ounce.
The price of gold is currently less than $100 away from a record high reached in May. Unlike the previous surge in May, driven by geopolitical concerns following a helicopter crash in Iran, the current increase is attributed to expectations of lower interest rates in the U.S., making gold an attractive investment. Weak economic indicators in the U.S. have further fueled expectations of a rate cut by the Fed in September, with the upcoming Nonfarm payrolls data likely to influence these expectations. Precious metals such as platinum and silver also saw gains.
As for industrial metals, copper prices bounced back from a one-month low on Thursday, supported by a weaker dollar. Copper futures on the London Metal Exchange rose 1.5% to $10,074.50 a tonne, with one-month copper futures up 0.5% to $4.6490 a pound. However, the outlook for copper remains cautious, especially amid fading optimism about an economic rebound in China, the top importer of the metal. Key trade data from China scheduled for Friday is expected to provide more insights into market sentiment.
