Gold Prices Reach Two-Week Highs
Spot gold rose by 0.2% to $2,049.20 per ounce, while gold futures expiring in February increased by 0.5% to $2,060.65 per ounce as of 00:16 ET (05:16 GMT). Both instruments reached their highest levels in over two weeks and are poised for a weekly gain of over 1%. Thursday saw the dollar hitting four-month lows. This decrease in economic growth suggests milder inflation and slower labor market activity, both crucial factors the Federal Reserve considers when deciding on interest rate cuts. Later today, the Fed’s preferred inflation gauge, the PCE price index data, will be released, and it is still anticipated to be above the Fed’s 2% annual target. Should this trend continue, the central bank could delay any potential interest rate hikes until later in 2024.
Record-Breaking Gold Prices and the Impact on Copper
Expectations of rate cuts in March 2024 contributed to substantial gains in gold over the past week. However, some officials at the Federal Reserve cautioned that hopes for early monetary easing were overly optimistic. Despite these warnings, gold is now trading at a price less than $100 away from the record high it reached earlier this month, as it benefits from the possibility of lower interest rates. Meanwhile, copper prices remained relatively stable on Friday, but they are hovering around their highest levels since early August. Copper futures expiring in March stood at $3.9253 per pound, with a 0.9% weekly gain marking the second consecutive week of growth. The increase in copper prices can be attributed to expectations of lower interest rates in 2024, which are believed to stimulate global economic activity and support copper demand. Moreover, the transition towards green energy and electric vehicles is predicted to boost demand for copper, while mine closures in Peru and Panama are expected to tighten copper supplies.