Investing.com– Gold prices rose in Asian trading on Friday as signs of a slowdown in the U.S. economy fueled demand for the yellow metal, although gains were limited pending further interest rate reduction indices based on key inflation data.
The yellow metal was also poised for significant weekly losses after falling from record highs over the past five sessions as traders largely priced in expectations of anticipated U.S. interest rate cuts.
The rose 0.2% to $2,335.86 an ounce, while the June expiry rose 0.2% to $2,335.68 an ounce as of 01:00 ET (05:00 GMT).
Bullion prices saw some relief after the fall in , following weaker-than-expected gross domestic product data. But that relief was limited as a stronger GDP price index caused traders to further anticipate expectations of interest rate cuts by the Federal Reserve.
Gold in weekly loss as PCE data approaches
Spot prices are expected to lose 2% this week, extending their decline from record highs reached earlier in April. Prices had reached highs of around $2,430 per ounce.
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One of the main factors putting pressure on gold has been a decline in the risk premium linked to unrest in the Middle East, as a war between Iran and Israel failed to materialize.
But the main Source of gold’s loss was the decline in bets that the Fed would cut interest rates. The showed that traders did not expect the Fed to start cutting rates until September or the fourth quarter.
This brought the upcoming PCE Price Index data into focus. This figure is the Fed’s preferred inflation indicator and is likely to be factored into the central bank’s outlook.
Higher rates for a long period of time bode ill for gold, as they increase the opportunity cost of investing in the yellow metal.
Other precious metals advanced on Friday, but also suffered heavy losses over the week. The rose 0.6% to $931.25 an ounce, while the rose 0.9% to $27.60 an ounce.
Copper price rebounds to 2-year high, BHP-Anglo deal considered
Among industrial metals, the price of copper benefited from the weakness of the dollar and reached its highest level in two years.
Prices on the London Metal Exchange rose 0.8% to $9,983.50 a tonne, while prices rose 0.7% to $4.5745 a pound.
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Attention now turns to major miner BHP Group Ltd’s (ASX:) nearly $39 billion takeover bid for small copper miner Anglo-American PLC (LON:), which could create the largest copper miner in the world. But reports have shown that Anglo’s board largely rejected the offer.
The prospect of tighter markets remained on the table after Chinese copper refiners announced production cuts. Tighter Western sanctions on Russian metal exports have also heralded a tightening of markets.
