Gold prices hit record highs above $2,500 as rate cut hopes rise By Investing.com

Investing.com– Gold prices steadied in Asian trade on Wednesday after hitting record highs this week, as the prospect of lower U.S. interest rates hit the dollar and spurred more flows into the yellow metal.

Broader metals prices also advanced, benefiting from a weaker dollar and lower Treasury yields, although their pace of gains slowed amid a broader risk-off move in markets.

It was up 0.1 percent at $2,515.44 an ounce, while December expiry was up 0.1 percent at $2,553.35 an ounce by 00:51 ET (0451 GMT). Spot prices hit a record high of $2,531.72 an ounce on Tuesday.

Gold Backed by Rate Cut Bets; Powell, Fed minutes of focus

Gold and metals prices were mainly supported by persistent bets that the Federal Reserve will start cutting interest rates in September.

Traders were divided into a discount of 25 or 50 basis points.

The focus this week is squarely on an address at the Jackson Hole Symposium on Friday, where he is expected to continue the Fed’s dovish tilt. But analysts do not expect Powell to explicitly predict potential rate cuts.

The Fed’s late-July meeting is also scheduled for later in the day after the central bank struck a convenient chord during the meeting.

The prospect of lower rates bodes well for gold as it lowers the opportunity cost of investing in non-performing assets.

That notion, along with recent dollar weakness, has been a key driver of gains in metals markets. But much of that buying went into gold, while other precious metals posted marginal gains.

fell 0.1% to $956.25 an ounce, while rose 0.1% to $29.538 an ounce.

Copper settles as markets weigh improved Chinese demand

Among industrial metals, copper prices rose slightly on Wednesday, extending a rebound from recent lows on signs of improving demand in top importer China.

The London Metal Exchange benchmark rose 0.4 percent to $9,222.50 a tonne, while on the month it rose 0.2 percent to $2,554.10 a pound.

Data earlier this week showed China’s copper exports fell in July as domestic buyers took advantage of the recent weakening in copper prices.

The reading showed some improvement in Chinese copper demand after copper imports into the country fell for two consecutive months.

But signs of lingering economic weakness in China continued to limit copper’s overall gains as the world’s biggest copper importer struggles with a nearly two-year post-Covid recovery.