Gold Prices Reach Record High Above $2,700; Copper Supported by China

Gold prices continued their ascent to record highs during Asian trading on Wednesday, driven by ongoing optimism regarding lower U.S. interest rates, which negatively impacted the dollar. Traders are anticipating additional insights into the U.S. economy in the coming days.

In the realm of industrial metals, copper prices saw a slight decrease after reaching two-month highs, attributed to expectations of stimulus measures from China, the world’s largest copper importer.

Recent declines in broader metal prices were linked to the dollar’s weakening, which fell to a 14-month low following the Federal Reserve’s interest rate cuts last week. The central bank has indicated the beginning of an easing cycle, suggesting that rates may decrease further in the following months.

Gold rose by 0.3%, reaching a new high of $2,670.52 per ounce, while December futures peaked at $2,694.75 per ounce.

### Gold Rises on Rate Cut Optimism; More Insights Expected

The potential for lower interest rates has been a significant factor supporting gold prices, as investors are factoring in a reduced opportunity cost for holding non-yielding assets. A number of Federal Reserve officials are scheduled to speak this week, providing additional insights on interest rates, with a significant address expected on Thursday.

The Fed’s preferred inflation measure is set to be released on Friday and is anticipated to influence the central bank’s future rate decisions.

Analysts from Citigroup suggest that the Fed may reduce rates by a total of 125 basis points following last week’s 50 basis-point cut, while Goldman Sachs predicts cuts of 25 basis points at each meeting from November through June 2025.

The influence of lower rates on the dollar has allowed for gains in precious metals. Additionally, gold is seeing an uptick in safe-haven demand amidst escalating tensions in the Middle East, particularly as Israel continues its military operations against Hamas and Hezbollah.

Other precious metals experienced slight declines on Wednesday, though they maintained significant gains from previous sessions. Silver decreased by 0.1% to $988.80 per ounce, while palladium fell 0.5% to $32.267 per ounce.

### Copper Prices Mixed, Continued Optimism from China

On the London Metal Exchange, benchmark copper saw a slight increase of 0.3% to $9,858.50 per ton, while one-month copper contracts dipped by 0.2% to $4.5158 per pound. Both contracts remained at over two-month highs.

Copper prices surged on Tuesday in response to additional monetary stimulus measures introduced by China, with traders optimistic about the potential boost to the country’s copper demand. However, analysts contend that Beijing must implement further measures to effectively support economic growth, particularly from a fiscal standpoint.