Gold Prices Steady as CPI Data Takes Center Stage; Copper Gains from China Stimulus

Gold prices experienced minimal movement in Asian trading on Thursday, remaining under pressure from a strengthening dollar as market attention shifted towards crucial inflation data expected soon, which may provide insights into future interest rate decisions.

In contrast, copper prices saw a rise, rebounding from recent declines following China’s announcement of plans for fiscal stimulus measures.

Despite the uptick in copper, metal prices continued to face downward pressure from the strong dollar, as traders adjusted expectations for a slower approach to interest rate reductions by the Federal Reserve. This adjustment has contributed to a pullback in gold prices from their recent record highs.

Spot gold increased by 0.2% to $2,613.15 an ounce, while gold futures for December also rose 0.2%, reaching $2,630.20 an ounce.

### Awaiting CPI Data for Rate Insights

The focus remained on the consumer price index (CPI) inflation data expected later on Thursday, which is anticipated to influence the Federal Reserve’s stance on interest rates. The report is likely to indicate a slight easing in headline CPI, while core CPI may show persistence in its increase for September.

With ongoing inflation and a robust labor market, the Fed may have less motivation to implement sharp interest rate cuts. Strong payroll data released last week reinforced this sentiment, with traders no longer expecting a 50-basis-point cut by the Fed in November.

Minutes from the Fed’s September meeting noted policymakers’ support for a 50 bps cut but highlighted their uncertainty regarding the pace of future reductions.

Less aggressive rate cuts could negatively affect gold and other non-yielding assets, as this increases their opportunity costs.

Other precious metals also climbed on Thursday but were recovering from significant losses. Platinum futures rose by 1% to $969.75 an ounce, while silver futures increased by 0.2% to $30.742 an ounce.

### Copper Gains Ground Amid China Stimulus Focus

Benchmark copper futures on the London Metal Exchange rose by 0.6% to $9,749.50 per ton, and December copper futures increased by 0.5% to $4.4355 per pound. Both contracts had experienced substantial declines earlier in the week, as recent monetary stimulus efforts from China fell short of expectations.

However, China has unveiled plans for fiscal stimulus, with the finance ministry scheduled to provide further details in an upcoming briefing. Investors are keenly anticipating targeted measures to stimulate growth in the world’s largest copper importer, which is currently dealing with severe deflation and a prolonged downturn in its property market.