Investing.com — Gold prices rose in Asian markets on Thursday, hovering near record highs as a weaker dollar supported the precious metal amid growing expectations of a U.S. interest rate cut.
Demand for safe haven metals also increased in the precious metals market following reports of a possible deterioration in trade relations between the United States and China.
As of 00:58 ET (04:58 GMT), crude was up 0.3% at $2,466.18 an ounce, while August contracts rose 0.4% to $2,469.55 an ounce. Spot prices had soared to a record high of $2,483.78 an ounce.
Gold rises on hopes of rate cuts and safe-haven demand
Gold has recorded strong gains over the past three trading days as weak U.S. inflation data and dovish comments from the Federal Reserve raised expectations of an interest rate cut.
Traders see a 94% chance that the Fed will cut rates by 25 basis points in September, with a slight chance of a 50 basis point cut.
This belief sent the dollar plummeting, dropping it to a four-month low and supporting commodities priced in dollars.
Additionally, safe-haven demand for gold increased after Bloomberg reported that the United States was considering tougher trade restrictions, particularly against China’s technology and semiconductor manufacturing sectors.
Such a move would anger Beijing and could spark a new trade war between the two countries.
Republican presidential candidate Donald Trump’s comments that Taiwan should pay for US defense supplies have also continued to spur concern about China.
Other precious metals followed gold in the rise, rising 0.2% to $1,011.75 an ounce and 0.7% to $30.573 an ounce.
Copper prices fall on China fears
Among industrial metals, copper prices fell as deteriorating sentiment towards China hurt the outlook for copper. China is the world’s largest copper importer, and any economic headwinds against the country would cast a shadow over the outlook for copper demand.
The London Metal Exchange’s benchmark price was down 0.2% to $9,613.50 a tonne, while one-month contracts were down 0.4% to $4.3985 a pound.
In addition to worries about the China trade war, copper markets have also been buffeted by weak economic data from the country, which released data earlier this week showing second-quarter growth slower than expected.
Attention is now focused on the Third Plenary Session of the Communist Party of China (3rd Plenum) as pressure grows on Beijing to introduce further stimulus measures.
