Gold Prices Steady at 10-Day High Amid Growing Rate Cut Expectations

Gold prices stabilized at a 10-day high during Asian trading on Thursday, supported by increasing expectations of interest rate cuts by the Federal Reserve, which weakened the dollar and lowered Treasury yields.

However, gold’s upward momentum faced resistance from the hawkish hints in the minutes of the Fed’s June meeting, along with traders remaining cautious ahead of key nonfarm payroll data. As of 00:27 ET (04:27 GMT), gold rose 0.1% to $2,359.56 per ounce, while August futures slipped 0.1% to $2,367.15 per ounce.

### Gold Remains Firm Amid Rate Cut Speculations

The precious metal posted significant gains on Wednesday, reflecting a sharp decline in the dollar as traders increased their forecasts for a potential rate cut in September. This shift in sentiment followed weaker-than-expected economic data and a disappointing reading on employment, raising concerns that the U.S. economy might be slowing.

Market indicators suggested that traders were pricing in over a 68% probability of a 25 basis point cut in September, a rise from a 59% likelihood noted the previous day. Lower interest rates tend to favor non-yielding assets like gold, as they reduce the attractiveness of interest-bearing investments.

Nonetheless, the optimism surrounding rate reductions was tempered by the Fed’s June meeting minutes, which indicated that policymakers remained uncertain about effectively lowering borrowing costs. Additionally, the cautious atmosphere ahead of the nonfarm payroll data, which has regularly exceeded expectations in recent months, limited overall sentiment. Improved risk appetite led traders to gravitate toward stocks and currencies instead.

In other precious metals, prices were mixed, with platinum increasing by 0.7% to $1,019.40 per ounce, while palladium fell by 0.5% to $30.70 per ounce. Notably, silver has significantly outperformed gold over the past year.

### Copper Prices Hold Steady Amid Economic Uncertainty

In the industrial metals sector, copper prices were muted following some gains from a weaker dollar. However, any advances were restrained by indications of a cooling U.S. economy and concerning signals from China, which impacted copper’s performance this week.

On the London Metal Exchange, benchmark copper dropped 0.2% to $9,849.00 per tonne, while one-month copper decreased 0.1% to $4.5255 per pound. Both contracts have faced substantial losses throughout June, as sentiment regarding the leading importer, China, deteriorated and global economic growth appeared to slow, negatively affecting copper demand.