Investing.com — Gold prices were slightly lower in Asian markets on Friday but were still up sharply from the previous day’s trading after weaker-than-expected U.S. inflation data strengthened expectations of a rate cut in September.
Gold prices benefited from a sharp drop in the dollar on Thursday, breaking through the closely watched $2,400 an ounce mark and dropping to less than $50 from its all-time high. Gold prices are expected to perform well for the week.
As of 00:06 ET (04:06 GMT), it was down 0.3% to $2,408.52 an ounce, while August maturities were down 0.3% to $2,413.75 an ounce.
Gold set for weekly gain amid rate cut jubilation
Spot prices are expected to rise about 0.7% this week, with most of the increase coming on Thursday.
The data released Thursday came in slightly weaker than expected, raising hopes that calming inflation will give the Fed more confidence to start cutting interest rates.
That view sent stocks lower, benefiting metals markets. Traders now see a more than 82% chance of a 25-basis-point rate cut in September, up from about 64% last week.
Higher interest rates make yields on cash and debt much more attractive, so lower interest rates reduce the opportunity cost of investing in non-yielding assets such as gold.
Other precious metals fell on Friday but are also expected to benefit from lower interest rates.
It fell 0.4% to $1,015.10 an ounce and 0.7% to $31.457 an ounce.
Copper prices fall as Chinese imports fall
Among industrial metals, copper prices fell on Friday after data showed imports into China, the world’s largest copper importer, fell in June.
The London Metal Exchange benchmark fell 0.3% to $9,761.50 a tonne, while one-month contracts were down 0.7% to $4.4977 a pound.
China’s imports of raw copper and copper products fell 3 percent to 436,000 tonnes in June from a year earlier, government data showed on Friday.
The figures came after China’s overall gross domestic product unexpectedly contracted in June, raising concerns about weak domestic demand and a slowing economic recovery.
China’s growth surged to its highest level in two years, beating expectations, but rising trade tariffs on key Chinese exports such as electric vehicles could offset the trend.
Attention is now turning to the Third Plenum of the Chinese Communist Party, scheduled to take place next week, for further clues on the economy and stimulus measures.
