Gold prices move little as safe haven demand remains limited

Gold prices moved little in Asian trade on Thursday, seeing little safe haven demand despite political turmoil in France and South Korea, as risk appetite improved and the dollar remained strong.

A rally on Wall Street- to record highs- largely undermined haven demand for gold, as did comments from Federal Reserve Chair Jerome Powell flagging a more cautious approach to future interest rate cuts. 

Spot gold fell slightly to $2,649.09 an ounce, while gold futures expiring in February fell 0.1% to $2,672.99 an ounce by 23:14 ET (04:14 GMT).  Gold sees limited safe haven demand as risk assets surge 

The yellow metal saw limited safe haven demand this week even as France’s government collapsed, while calls for the impeachment of South Korean President Yoon Suk-Yeol grew after he unsuccessfully attempted to impose martial law in the country. 

Risk-driven assets largely brushed off the political turmoil. While local markets in France and South Korea did weaken, broader markets largely advanced this week, with Wall Street indexes hitting a record high overnight on strength in technology shares. 

Other precious metals were also muted on Thursday. Platinum futures rose 0.1% to $949.60 an ounce, while silver futures fell 0.5% to $31.767 an ounce. 

Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.2% to $9,086.50 a ton, while February copper futures fell 0.1% to $4.1943 a pound.  Dollar steady after Powell comments, payrolls awaited 

Resilience in the dollar also pressured metal markets. The greenback rose sharply earlier this week after U.S. President-elect Donald Trump threatened to impose tariffs on several countries. 

The greenback mostly retained these gains after the Fed’s Powell lauded recent strength in the U.S. economy.

Speaking at a New York Times (NYSE:NYT ) event, Powell said strength in the economy allows the Fed to adopt a more cautious approach to future easing.

While he did not downplay expectations for a December rate cut, Powell’s comments did spur some caution over a slower pace of rate cuts in 2025. Expectations of inflationary policies under Trump also spurred uncertainty over potentially high rates in the long term. 

Higher for longer rates herald more pressure on non-yielding assets such as metals. 

Focus this week is on key nonfarm payrolls data, due on Friday. The reading is likely to factor into expectations for future rate cuts.

Source: Investing.com