Gold prices edged up in early Asian trade on Friday, positioning themselves for a modest weekly gain as ongoing uncertainty over U.S. interest rates and global trade tensions drove demand for safe-haven assets. However, the stronger U.S. dollar and hawkish signals from the Federal Reserve capped any significant upward movement in gold prices.
Spot gold rose 0.1% to $2,672.12 per ounce, while February gold futures gained 0.2% to $2,695.74 per ounce by 23:58 ET (04:58 GMT).
Weekly Gains as Economic Jitters Boost Safe Haven Demand
Gold is on track for a weekly gain of around 1.5%, as investors sought refuge in the precious metal amid growing concerns over economic uncertainty. A key focus for the market was the release of the U.S. nonfarm payrolls report later on Friday, which could influence the Federal Reserve’s future decisions regarding interest rates.
The labor market data has consistently outperformed expectations over the past year, reinforcing the resilience of the U.S. economy. This has provided the Fed with room to maintain or potentially raise interest rates, making gold’s appeal as a non-yielding asset somewhat less attractive.
Fed’s Caution on Rate Cuts Amid Inflation Concerns
Recent minutes from the Federal Reserve’s December meeting highlighted policymakers’ cautious stance on further rate cuts, citing persistent inflation and a resilient labor market. Fed officials also voiced concerns about inflationary pressures stemming from both protectionist policies and fiscal expansion plans under President-elect Donald Trump. As his inauguration approaches on January 20, uncertainty over his policy agenda is expected to increase, adding to the volatility in financial markets.
Other Precious Metals Also Gain
Other precious metals also saw gains on Friday, with platinum futures rising 0.9% to $993.20 per ounce, while silver futures increased 0.5% to $31.16 per ounce by 00:12 ET (05:12 GMT).
Copper Rises on Stimulus Hopes in China
Among industrial metals, copper prices extended their upward momentum, supported by hopes of increased stimulus efforts from China. Weak economic data from China, the world’s largest copper importer, sparked expectations that the Chinese government would introduce further stimulus measures to boost domestic demand.
Benchmark copper futures on the London Metal Exchange rose 0.5% to $9,123.50 per ton, while March copper futures climbed 0.5% to $4.3355 per pound. Weak inflation data from China on Thursday fueled optimism that Beijing would take action, including fiscal measures, to stimulate the economy and encourage private spending.
The prospect of heightened U.S. trade tariffs also added to the expectation that China would ramp up its stimulus efforts to protect its already struggling economy. Copper prices have faced downward pressure amid concerns that a slowdown in Chinese demand could weaken the outlook for the industrial metal.
As China grapples with years of sluggish growth, copper’s performance remains closely tied to the health of the Chinese economy.、
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