Gold prices climbed in Asian trading on Friday as the dollar weakened following an outsized interest rate cut by the Federal Reserve. The move fueled market optimism for further rate reductions, bolstering risk-driven assets like gold and copper.
Spot gold edged up 0.3% to $2,593.31 an ounce, while gold futures for December delivery increased by 0.2% to $2,618.40 an ounce by 00:43 ET (04:43 GMT).
Initially, gold saw a negative reaction to the Fed’s 50 basis point rate cut on Wednesday due to Fed Chair Jerome Powell’s less dovish outlook for long-term rates. However, markets later rallied on the expectation of near-term rate reductions.
Rising geopolitical tensions in the Middle East also added to gold’s appeal. Reports of an Israeli attack on Hezbollah electronic devices have heightened regional tensions, further driving demand for gold as a safe-haven asset.
Other precious metals saw mixed results, with platinum futures steadying at $989.55 an ounce, while silver futures fell 0.3% to $31.34 an ounce.
Copper Rises on China Property Stimulus Hopes
Industrial metal copper also posted gains on Friday, buoyed by media reports suggesting that China, the world's top copper importer, may introduce new measures to support its struggling property market.
Benchmark copper futures on the London Metal Exchange rose 0.5% to $9,582.50 a ton, while one-month copper futures climbed 0.7% to $4.3788 a pound.
Meanwhile, the People’s Bank of China left its benchmark loan prime rate unchanged on Friday, disappointing traders who had anticipated further rate cuts to bolster economic growth.
Still, calls for more government stimulus in China have grown, especially following weak economic data for August, which further dampened the country's outlook.
