Gold prices steady at 10-day high as rate cut bets grow
2024.07.04 01:02
Investing.com– Gold prices steadied at a 10-day high in Asian trade on Thursday after growing bets on interest rate cuts by the Federal Reserve pulled down the dollar and Treasury yields.
But gold’s advance was stalled by hawkish signals from the minutes of the Fed’s June meeting, while anticipation of key nonfarm payrolls data kept traders cautious.
rose 0.1% to $2,359.56 an ounce, while expiring in August fell 0.1% to $2,367.15 an ounce by 00:27 ET (04:27 GMT).
Gold benefits from rate cut bets, but caution persists
The yellow metal marked strong gains on Wednesday, tracking a sharp fall in the dollar as traders upped their bets for a rate cut in September.
The trend came following weaker-than-expected data and a soft reading on , which pushed up bets that the U.S. economy was cooling.
The showed traders pricing in an over 68% chance for a 25 basis point cut in September, up from a 59% chance seen a day ago.
Lower rates bode well for non-yielding assets such as gold, given that they diminish the appeal of and the .
But optimism over rate cuts was still constrained by hawkish signals from the minutes of the Fed’s June meeting, which showed policymakers were still not confident over bringing down lending costs.
Caution ahead of key data, which has consistently topped expectations in recent months, also kept sentiment limited. Improved risk appetite also saw traders prefer assets such as stocks and currencies.
Other precious metals were mixed. rose 0.7% to $1,019.40 an ounce, while fell 0.5% to $30.70 an ounce. But silver had vastly outperformed gold over the past 12 months.
Copper prices muted amid mixed economic cues
Among industrial metals, copper prices were subdued after marking some gains on a softer dollar. But gains in copper were limited by signs of cooling U.S. economic activity, while weak signals from China also tied into copper weakness this week.
Benchmark on the London Metal Exchange fell 0.2% to $9,849.0 a tonne, while one-month fell 0.1% to $4.5255 a pound.
Both contracts were nursing steep losses through June as sentiment over top importer China soured, while global economic growth also appeared to be cooling, which bodes poorly for copper demand.
