Gold prices hit record high
Gold prices reached an all-time high during Asian trading on Friday. This surge was driven by ongoing speculation that the Federal Reserve might lower interest rates soon, as well as heightened demand for safe-haven assets due to the closely contested U.S. presidential election.
The yellow metal shot up on Thursday and Friday, tracking declines in the dollar and Treasury yields as markets maintained bets on an interest rate cut despite some stronger inflation data. Signs of weakness in the labor market also furthered this notion. Spot gold rose 0.3% to $2,566.59 an ounce, while gold futures expiring in December rose 0.6% to $2,594.70 an ounce by 23:47 ET (03:47 GMT).
Spot gold surged to a record high of $2,570.06 earlier in the session, while gold futures neared a peak of $2,600.
Gold buoyed by rate cut speculation
Gains in the yellow metal came as investors remained convinced that the Fed will cut rates when it meets next week. Markets were uncertain over the scale of the potential rate cut, with expectations shifting between a smaller 25 bps reduction and a larger 50 bps cut based on economic data. Analysts expect next week’s meeting to mark the beginning of an easing cycle for the Fed, with the central bank expected to cut rates by at least 100 bps by the end of the year.
Lower rates bode well for gold and other precious metals, as they lower the opportunity cost of investing in non-yielding assets. Other precious metals rose on this notion, although they still lagged behind gold. Platinum futures rose 0.6% to $989.80 an ounce, while silver futures rose 0.6% to $30.280 an ounce.
Additional Insight on the Copper Market
Industrial metals were also buoyed by the prospect of lower rates, indicating increased economic activity. Copper prices were supported by hopes of more stimulus measures in China, the top importer of the metal. Benchmark copper futures on the London Metal Exchange rose 0.7% to $9,280.0 a ton, while one-month copper futures rose 0.4% to $4.2260 a pound.
A string of weak economic readings from China spurred increased bets that Beijing will roll out more stimulus measures to buoy growth. Analysts are expecting “incremental” stimulus measures from China through the rest of the year, which could continue to support copper prices in the near term.
News.Az
