Gold prices advanced in Asian trading on Friday, supported by a weaker U.S. dollar and growing confidence that the Federal Reserve will deliver an interest rate cut next week. Traders also kept a close eye on a key inflation reading expected later in the day.
Spot gold climbed 0.5% to $4,227.88 an ounce at 02:28 ET (07:28 GMT), while February U.S. gold futures eased 0.3% to $4,256.95.
Gold strengthens as easing expectations build; PCE in focus
The U.S. Dollar Index hovered near its lowest level in five weeks after slipping further, with markets pricing an 88% chance of a 25-basis-point cut at the Fed’s Dec. 9–10 meeting and anticipating additional reductions in early 2025.
The softer dollar helped lift gold by making the metal more affordable for buyers outside the United States.
Recent economic data have reinforced the argument for looser monetary policy, showing renewed softness in the U.S. labor market. Weekly jobless claims fell sharply by 27,000 to 191,000 — the lowest reading since September 2022 — while ADP’s private payrolls report earlier in the week showed a 32,000-job decline, the steepest drop in more than two years.
Attention now turns to the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, due later Friday. A mild reading could support not only a December cut but also further easing in the months ahead.
Still, rising U.S. Treasury yields remain a headwind, increasing the opportunity cost of holding non-yielding assets such as gold.
Industrial metals rally, copper surges 2%
A weaker dollar also boosted other precious and base metals.
Silver futures advanced 2.2% to $58.77 an ounce, while platinum gained 0.8% to $1,673.60 an ounce.
Copper saw some of the strongest moves: benchmark LME copper futures jumped 2.1% to $11,675.20 a ton, and U.S. copper futures rose more than 2% to $5.47 per pound.