Investing.com– Gold prices edged higher on Thursday, supported by slowing U.S. inflation data from the previous session, which reinforced expectations of a Federal Reserve rate cut in December.
Although the Fed is broadly anticipated to implement a third rate cut next month, minutes from the November meeting released on Tuesday revealed differing opinions among officials on the extent of future rate reductions.
rose 0.4% to $2,645.73 an ounce, while expiring in February was up 0.2% to $2,669.41 by 07:10 ET (12:10 GMT).
Strong PCE, GDP data spur rate cut doubts
data- the Fed’s preferred inflation gauge- rose as expected in October, moving further above the central bank’s 2% annual target. The reading was accompanied by data showing steady growth in the third quarter, as well as slightly stronger-than-expected weekly data.
While the readings did little to deter expectations for a December rate cut, traders were seen growing more uncertain over the outlook for rates in 2025.
Uncertainty over a Donald Trump presidency added to the mix, given that he is expected to dole out more expansionary policies and trade tariffs that will push up inflation.
This trend is expected to limit the Fed’s easing cycle. UBS analysts said in a recent note the central bank will slow down its rate cuts to a once-a-quarter affair in 2025, and also forecast a higher terminal rate.
Higher-for-longer rates bode poorly for non-yielding assets such as gold.
Other precious metals also fell on Thursday and were nursing steep losses in recent weeks. steadied at $933.65 an ounce, while fell 1% to $30.523 an ounce.
Copper prices weak, more China cues awaited
Among industrial metals, copper prices moved little after logging steep losses in recent sessions, with focus turning to more economic cues from top copper importer China.
Benchmark on the London Metal Exchange fell 0.5% to $8,978 a ton, while February steadied at $4.1238 a pound.
The red metal was pressured by growing fears of a Sino-U.S. trade war, after U.S. President-elect Donald Trump threatened to impose more tariffs against China.
Traders were also waiting to see what stimulus measures Beijing will enact to offset economic pressure from any increased U.S. tariffs.
Chinese data for November is due on Saturday and will offer more cues on the economy.
(Ambar Warrick contributed to this article)
