Investing.com– Gold prices stabilized in Asian trading on Friday, but recorded their worst weekly performance in more than three years as high U.S. inflation and less dovish signals from the Federal Reserve raised doubts about the drop in interest rates.
The yellow metal was also hurt by a rise in risk in the wake of a Donald Trump victory in the 2024 presidential election. Markets were also uncertain about the outlook for interest rates under Trump.
Gold rose 0.2% to $2,569.47 an ounce, while December expiry rose 0.1% to $2,574.05 an ounce as of 07:55.
Gold expected to lose more than 4% this week
Spot gold traded down about 4.3% this week, its worst performance since June 2021. The yellow metal initially fell from record highs after Trump’s election victory increased the risk appetite last week.
Losses deepened this week as the currency hit its highest level in a year, amid growing uncertainty over the near-term outlook for interest rates.
U.S. inflation remained stable in October, while comments from Federal Reserve officials suggested the central bank was more cautious about further cutting interest rates.
Fed Chairman Jerome Powell said the resilience of the U.S. economy meant the central bank could take its time before cutting rates further. His comments led traders to reduce expectations of a rate cut in December.
Operators estimated the probability of a 25 basis point rate cut in December at 61%, compared to 85.7% on Thursday. Operators also estimated the probability that rates would remain unchanged at 39%.
The prospect of higher rates for a long time bodes ill for gold and other precious metals. Expectations of more inflationary policies under Trump have also seen traders prepare for higher long-term rates.
The rose 0.3% to $946.70 an ounce, while silver futures rose 0.1% to $30.610 an ounce on Friday. Both metals also suffered significant losses this week.
Copper prices rise after China data, but maintain sharp weekly loss
Among industrial metals, copper prices rose following mixed economic readings from top importer China. But prices of the red metal suffered steep losses this week after the country’s stimulus measures were largely disappointing.
The benchmark on the London Metal Exchange rose 0.3% to $9,056.50 a tonne, while the December rate rose 0.5% to $4.0968 a pound. Both contracts fell 4% to 5% this week, their worst fall since the start of July.
Friday’s data showed little improvement in China’s economy, with the economy growing less than expected in October, as did the.
But sales have been a bright spot, increasing more than expected during the Golden Week holiday.
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