Investing.com — Gold prices rose in Asian trading on Friday, extending their overnight gains as solid U.S. inflation data was offset somewhat by a soft outlook for the labor market.
Among industrial metals, copper prices soared on hopes of further stimulus from China's fiscal stimulus.
A weaker dollar, off a two-month high, lifted broad metal prices as traders maintained the view the Federal Reserve will cut interest rates in the coming months, albeit at a slower pace. . Still, gold remained well below its recent highs.
By 04:41 ET (04:41 GMT), the stock rose 1.4% to $2,645.6 an ounce, while December expiry rose 1.4% to $2,662.50 an ounce.
Gold set for calm week amid bets on small interest rate cut
Gold prices are still expected to end the week slightly lower, with markets expecting the Federal Reserve to cut interest rates modestly in the coming months.
Thursday's inflation data further reinforced this idea. However, this was offset by labor market data that showed weekly jobless claims rose more than expected.
The dollar fell from a two-month high on jobless claims data as weak labor markets are expected to prompt the Fed to cut interest rates further.
It has been revealed that traders are pricing in an 81% probability of a 25 basis point rate cut in November.
However, while the Fed is expected to cut rates at a more moderate pace, a rate cut is still a good sign given the reduced opportunity cost of gold and other non-yielding assets.
Other precious metals also rose on Friday, recouping much of their recent losses. It rose 3.2% to $987.85 an ounce and rose 2.9% to $31.558 an ounce.
Copper prices rise as China's fiscal stimulus measures become the focus
The benchmark price on the London Metal Exchange rose 0.9% to $9,772.50 a tonne, while December rose 1.3% to $4.4562 a tonne.
Copper's rally comes after the red metal posted a sharp decline earlier this week following disappointing signals on stimulus from top importer China.
Amid growing calls for more targeted economic support, China's Finance Ministry is scheduled to hold a press conference on Saturday to outline further fiscal stimulus.
Analysts expect the Chinese government to roll out at least $2 trillion ($283 billion) in measures, much of it aimed at boosting consumer spending.
