Gold prices rise after release of CPI data; Copper prices increase due to focus on China’s stimulus efforts

Gold prices rise in Asian trade with mixed signals

Gold prices rose in Asian trade on Friday, continuing their upward trend from the previous day. This rise was fueled by strong U.S. inflation data, although it was somewhat dampened by a soft reading on the labor market.

Additional Insight: The mixed signals from the U.S. economic data indicate a level of uncertainty in the market, leading investors to turn to safe-haven assets like gold.

Copper prices surged amid anticipation of Chinese fiscal stimulus

In the industrial metals sector, copper prices saw a sharp increase as market participants awaited more signals from China regarding fiscal stimulus measures. Broader metal prices were also lifted by a weakening dollar, which retreated from two-month highs. Traders are maintaining bets on a Federal Reserve interest rate cut in the coming months, albeit at a slower pace.

Gold prices poised for a modest weekly performance

Although gold prices were on the rise, they were still set to end the week marginally lower. Market expectations of a smaller rate cut by the Federal Reserve in the near future influenced this trend. The latest inflation data supported this view, but it was countered by the labor market data showing an unexpected rise in weekly jobless claims.

Additional Insight: The market is closely watching Fed rate cut expectations, as any deviation from current forecasts could lead to significant volatility in gold prices.

Copper gains momentum with Chinese fiscal support in spotlight

Copper prices rebounded after a recent decline, following China’s ambiguous signals on stimulus measures. The focus now shifts to a planned press conference by China’s finance ministry to announce additional fiscal stimulus plans. Analysts anticipate at least 2 trillion yuan in stimulus, primarily targeted at bolstering private consumption.

Additional Insight: China’s fiscal stimulus measures could have a significant impact on industrial metal prices, especially copper, as the country is a major consumer of these commodities. Investors will closely monitor any developments in this regard.