Gold prices experienced a notable upswing in Asian trade on Friday, extending gains observed overnight as indications of a cooling U.S. labor market weighed on the dollar and Treasury yields, consequently bolstering the value of the yellow metal.
After enduring a two-week decline, bullion prices are now poised to break their losing streak. This resurgence is attributed partly to persistent safe haven demand, fueled by speculation that Israel and Hamas may not imminently reach a ceasefire agreement. Moreover, reports suggesting potential new U.S. trade tariffs on China have further intensified safe haven preferences among investors.
As of 00:53 ET (04:53 GMT), spot gold ascended by 0.3% to $2,354.06 per ounce, while gold futures expiring in June surged by 0.9% to $2,360.75 per ounce.
For the week, spot prices are anticipated to record a gain of over 2%, marking their first positive week in three, although they remain below the record highs attained in late-April.
The bullish momentum in gold prices gained traction on Thursday, following the release of data indicating a larger-than-anticipated increase in weekly U.S. jobless claims. This data, coupled with a notably softer-than-expected nonfarm payrolls reading for April, has reinforced market expectations of an early interest rate cut by the Federal Reserve, as the labor market shows signs of cooling.
Traders have consequently exhibited a slight uptick in bets on a September rate cut, with current expectations standing at nearly a 50% chance, as indicated by the CME Fedwatch tool.
The decline in U.S. Treasury yields and the dollar on Thursday further contributed to the strengthening of metal prices across the board.
In addition to gold, platinum futures rose by 0.2% to $994.80 per ounce, while silver futures saw a 1% increase to $28.657 per ounce. Both metals have also demonstrated notable weekly gains of 3% and 7.4%, respectively.
Meanwhile, copper prices near two-year highs were buoyed by weakness in the dollar. Three-month copper futures on the London Metal Exchange climbed by 0.5% to $10,013.50 a ton, with one-month copper futures rising by 0.6% to $4.6327 a pound, nearing recent two-year peaks.
However, the upward momentum in copper prices faced resistance due to mixed signals from China, the top importer of the metal. While optimism prevailed among copper bulls following China’s introduction of supportive policies for its property market, concerns arose over weakening demand as data revealed a decline in Chinese copper imports.
Furthermore, sentiment towards China was dampened by reports on Friday indicating the U.S. administration’s contemplation of additional trade tariffs on the country.
