Investing.com – Gold prices are slightly lower in Asian markets. As recession fears ease, demand for safe-haven assets has declined. This is despite expectations that interest rate cuts will continue to support gold prices near record levels.
Gold prices are heading for slight gains this week. However, overall gains were limited as investors speculated on a smaller rate cut in September.
December futures were down 0.1% at $2,453.02 an ounce, while December futures were down 0.1% at $2,490.15 an ounce at 01:08 ET (05:08 GMT).
Gold prices rise weekly on rate cut bets
Spot prices are up 0.9% this week and are about 30% away from record highs.
Weaker-than-expected inflation data earlier this week has also led to bets that the Federal Reserve will cut interest rates in September. This comes despite a monthly increase in inflation that has traders leaning toward a 25 basis point rate cut rather than a 50 basis point cut.
The stronger-than-expected data also boosted confidence in the U.S. economy while reducing expectations for further interest rate cuts.
However, the possibility of lower interest rates remains a positive factor for gold. This is because it reduces the opportunity cost of investing in assets that do not provide returns.
Fears of a full-scale war in the Middle East between Iran and Israel also keep demand for gold as a safe haven asset.
Analysts from Alpine Macro recommend buying gold if the situation in the Middle East worsens. This is especially true as Iran prepares to retaliate against Israel after the killing of Hamas leaders in Tehran.
Other precious metals prices fell today. But there are still some gains this week.
It fell 0.5% to $957.85 an ounce, while it fell 0.7% to $28.207 an ounce.
Copper prices fell but protests in Escondida helped boost weekly gains.
Among industrial metals, copper prices fell today. But it is expected to post its first weekly gain in six weeks. A strike at the world's largest copper mine has made the outlook for supplies more stringent.
On the London Metal Exchange, futures fell 0.2% to $9,128.0 a tonne, while they fell 0.1% to $4.1368 a pound. Both contracts rose about 3% this week, snapping a five-week losing streak.
Workers at the Escondida mine in Chile, which accounts for 5% of the world's copper supply. The strike ended this week in a dispute over compensation.
A prolonged production outage at Escondida could tighten the outlook for global copper supplies, which is expected to support prices.
But the rise in copper prices was limited by concerns about slowing demand for copper, especially after a series of weak economic data from China, a major copper importer.
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