Gold prices rise, record highs close as CPI data fuels rate cut bets by Investing.com

Investing.com– Gold prices rose in Asian trade on Thursday, staying near record highs as weaker-than-expected U.S. consumer inflation data boosted bets that the Federal Reserve will begin cutting rates.

Gains in the yellow metal were also hampered by rising risk appetite, while a monthly rise in inflation had traders positioning for a smaller rate cut in September.

It was up 0.2 percent at $2,452.56 an ounce, while it was up 0.4 percent at $2,490.40 an ounce by 01:05 ET (05:05 GMT).

Gold near record, September rate cut

Spot gold prices approached a record high of more than $2,480 this week as haven demand was also supported by worsening geopolitical tensions in the Middle East.

But gold initially marked a negative reaction to CPI data on Wednesday as it showed a monthly rise in inflation that traders favored less than a 25 basis point cut by the Fed in September. The tool had previously indicated that traders were divided between a 25 bps cut and a 50 bps cut, with the latter presenting a more favorable outlook for metals markets.

Still, the prospect of lower interest rates bodes well for gold, given that lower rates lower the opportunity cost of investing in the yellow metal. This has kept the yellow metal in sight of recent peaks, with losses in the dollar and Treasury yields as well.

Other precious metals also rose on Thursday. rose 0.5% to $935.65 an ounce, while rose 1.6% to $27.773 an ounce.

Copper rises on mixed China data

Among industrial metals, copper prices rose on Thursday on positive economic readings from top importer China, although the red metal still suffered steep losses in recent sessions.

The London Metal Exchange benchmark rose 0.5 percent to $8,991.50 a tonne, while on the month it rose 0.5 percent to $4.065 a pound.

Data from China showed some improvement in consumer spending, with a bigger-than-expected increase in July.

But – which is a key driver of China’s copper demand – rose less than expected, as did . China also grew unexpectedly.

Concerns about slowing Chinese demand led to steep losses in copper over the past month, especially as recent data also showed that Chinese copper imports fell for two consecutive months.