Gold prices remain steady as CPI data takes center stage, while copper benefits from Chinese stimulus measures.
Gold prices showed little movement in Asian trading on Thursday due to ongoing pressure from a stronger dollar, as attention shifted to important upcoming inflation data for clues on interest rates.
In the industrial metals sector, copper prices saw a slight increase, recovering some recent losses as China, the top importer, announced plans for fiscal stimulus measures.
However, the strength of the dollar weighed on metal prices, with traders anticipating a slower pace of interest rate cuts by the Federal Reserve, which had contributed to gold’s retreat from its record highs over the past week.
Spot gold rose 0.2% to $2,613.15 an ounce, while December gold futures also increased by 0.2% to $2,630.20 an ounce by 00:16 ET (04:16 GMT).
CPI Data Awaits for Rate Signals
Market focus was primarily on the consumer price index (CPI) inflation data set to be released later on Thursday, as it is expected to influence the Federal Reserve’s interest rate outlook.
The report is anticipated to show a slight easing in headline CPI, while core CPI is expected to remain stubbornly high in September.
Persistent inflation and a strong labor market provide the Fed with less motivation to implement significant rate cuts. Last week’s robust payrolls data contributed to this sentiment, leading traders to fully dismiss expectations for another 50 basis point cut by the Fed in November.
Minutes from the Fed’s September meeting indicated that policymakers supported the 50 basis point cut but were noncommittal about the pace of future reductions.
Smaller rate cuts are generally unfavorable for gold and other non-yielding assets, as they increase their opportunity costs.
Other precious metals also experienced gains on Thursday but were still recovering from significant losses. Platinum futures rose 1% to $969.75 an ounce, while silver futures increased by 0.2% to $30.742 an ounce.
Copper Gains Amid China Stimulus Plans
Benchmark copper futures on the London Metal Exchange climbed 0.6% to $9,749.50 per ton, while December copper futures rose 0.5% to $4.4355 per pound. Both contracts had seen sharp declines earlier this week as recent monetary stimulus measures from China fell short of expectations.
However, with China outlining plans for fiscal stimulus, the Chinese finance ministry is set to hold a briefing on Saturday to provide more details.
Investors are eager for targeted fiscal measures to stimulate growth in the world’s largest copper importer, especially as China faces rampant deflation and a prolonged downturn in the property market.
