Gold prices nurse tumble from record highs with Powell, rate cuts in focus

Investing.com-- Gold prices rose in Asian trade on Friday but were nursing a tumble from record highs in the prior session as caution before an address by Federal Reserve Chair Jerome Powell lent some support to the dollar.

The yellow metal raced to record highs earlier this week amid growing conviction that the Fed will begin cutting interest rates from September. While prices did retreat amid some profit-taking, gold still remained relatively well-bid.

Spot gold rose 0.4% to $2,495.52 an ounce, while gold futures expiring in December rose 0.6% to $2,530.70 an ounce by 01:24 ET (05:24 GMT). Spot prices were down slightly this week after hitting a record high of $2,531.72 an ounce. 

Powell address on tap amid rate cut speculation

Powell is set to talk at the Jackson Hole Symposium later on Friday, potentially offering up more cues on the Fed’s plans to begin trimming interest rates.

Markets are broadly pricing in a September rate cut, although CME Fedwatch showed traders somewhat split between a 25 or 50 basis point reduction. 

Bets on a deeper rate cut were furthered by soft labor data released earlier in the week, which showed a sharp downward revision in payrolls data over the year to March 2024.

The reading indicated that recent signs of cooling payrolls growth was from a much weaker position than initially thought, and ramped up concerns over a slowing U.S. economy. 

The prospect of slowing growth and lower interest rates bodes well for gold, given its safe haven nature. Lower rates also present a smaller opportunity cost for buying bullion.

Other precious metals rose on Friday but were also nursing a middling weekly performance. Platinum futures rose 0.7% to $959.75 an ounce, while silver futures rose 0.9% to $29.290 an ounce.

Copper prices rise, set for second week of gains 

Among industrial metals, copper prices rose on Friday and were set for a second straight week of gains as they saw an extended rebound from lows hit earlier in August.

Benchmark copper futures on the London Metal Exchange rose 0.8% to $9,204.50 a ton, while one-month copper futures rose 0.7% to $4.1655 a pound. Both contracts were up between 0.5% to 1% this week. 

Copper saw a two-week rebound from lows hit in August, aided by a mix of bargain buying and some improving sentiment towards top importer China. 

Markets also bet that lower U.S. interest rates will help improve global copper demand.