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Gold prices climbed in Asian trading on Friday due to signs of a slowing US economy, sparking some demand for the precious metal. However, investors awaited further indications of interest rate cuts from key inflation data, tempering gains.

Factors Influencing Gold Prices in Asian Trading

The price of gold was on track for significant weekly losses following a decline from near record highs observed over the past five sessions. This drop occurred as expectations for early US interest rate cuts diminished.

Spot gold increased by 0.2% to $2,335.86 per ounce, while gold futures expiring in June rose by 0.2% to $2,335.68 per ounce by 01:00 ET (05:00 GMT).

Focus on PCE Price Index Data and Outlook for Gold

A weakening US dollar, which followed softer-than-expected gross domestic product data, provided some relief to bullion prices. However, this relief was limited as a stronger GDP price index indicated that the Federal Reserve had reduced its expectations for interest rate cuts.

Decreased risk premium associated with tensions in the Middle East, as fears of an Iran-Israel conflict subsided, is one of the main factors contributing to the downward pressure on gold.

The primary driver of gold’s losses is the diminishing likelihood of Fed interest rate cuts. Traders now anticipate rate cuts to commence in September or the fourth quarter, as indicated by the CME Fedwatch tool.

The focus now rests on the upcoming release of the PCE price index data, which serves as the Fed’s preferred inflation gauge and is expected to influence the central bank’s outlook.

Other precious metals also experienced gains on Friday but remained on track for significant weekly losses. Platinum futures increased by 0.6% to $931.25 per ounce, while silver futures rose by 0.9% to $27.60 per ounce.

Copper prices rebounded to two-year highs, benefiting from a weaker dollar. Investors closely monitored a bid by BHP Group Ltd for Anglo American PLC, which could potentially create the world’s largest copper miner. However, reports suggested that Anglo’s board largely dismissed the offer.

Analysts anticipate tighter markets following production cuts signaled by Chinese copper refiners and stricter Western sanctions on Russian metal exports.

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