Gold prices advance past CPI data; Copper surges with China stimulus in focus

Gold prices rose in Asian trade on Friday, extending overnight gains as strong U.S. inflation data was somewhat offset by a soft reading on the labor market.

Among industrial metals, copper prices rose sharply in anticipation of more cues from China on fiscal stimulus.

Broader metal prices were buoyed by weakness in the dollar, which fell from two-month highs as traders maintained bets that the Federal Reserve will still cut interest rates in the coming months, albeit at a slower pace. Still, gold remained well below recent peaks.

Spot gold rose 1.4% to $2,645.6 an ounce, while gold futures expiring in December rose 1.4% to $2,662.50 an ounce by 00:41 ET (04:41 GMT).  Gold set for muted week amid bets on smaller rate cut 

Gold prices were still set to end the week marginally lower, as markets bet that the Fed will cut rates by a smaller margin in the coming months. 

Thursday’s consumer price index inflation data furthered this notion. But the reading was offset by labor market data showing a bigger-than-expected increase in weekly jobless claims.

The dollar fell from two-month highs after the jobless claims data, given that weakness in the labor market is expected to give the Fed more impetus to cut interest rates.

Traders were seen pricing in an 81% chance for a 25 basis point cut rate in November, CME Fedwatch showed. 

But while the Fed is expected to cut rates at a slower pace, lower rates still bode well for gold and other non-yielding assets, given that they reduce their opportunity cost. 

Other precious metals rose on Friday, recouping a bulk of recent losses. Platinum futures rose 3.2% to $987.85 an ounce, while silver futures rose 2.9% to $31.558 an ounce.  Copper rises with Chinese fiscal stimulus in focus

Benchmark copper futures on the London Metal Exchange rose 0.9% to $9,772.50 a ton, while December copper futures rose 1.3% to $4.4562 a pound.

Copper’s rally came after the red metal clocked steep losses earlier this week, following underwhelming signals on stimulus from top importer China.

China’s finance ministry is now set to hold a press conference on Saturday to outline plans for more fiscal stimulus, amid growing calls for more targeted economic support.

Analysts expect Beijing to roll out at least 2 trillion ($283 billion), with a bulk of the measures aimed at shoring up private consumption.

Source: Investing.com