Gold prices muted with CPI data in focus; copper buoyed by China stimulus

Investing.com– Gold prices moved little in Asian trade on Thursday amid persistent pressure from a stronger dollar, with focus turning to key upcoming inflation data for more cues on interest rates. 

Among industrial metals, copper prices advanced, recovering some measure of recent losses as top importer China outlined plans to implement fiscal stimulus measures. 

But metal prices were pressured by a strong dollar, as traders priced in a slower pace of interest rate cuts by the Federal Reserve. This notion had dragged gold off record highs over the past week.

Spot gold rose 0.2% to $2,613.15 an ounce, while gold futures expiring in December rose 0.2% to $2,630.20 an ounce by 00:16 ET (04:16 GMT). 

CPI data awaited for more rate cues 

Focus was squarely on consumer price index inflation data due later on Thursday, which is likely to factor into the Federal Reserve’s outlook on interest rates. 

The reading is expected to show headline CPI eased slightly, while core CPI remained sticky in September.

Sticky inflation and strength in the labor market give the Fed less impetus to cut interest rates sharply. Strong payrolls data released last week had sparked this notion, with traders now completely pricing out expectations for another 50 basis point cut by the Fed in November. 

 The minutes of the Fed’s September meeting showed policymakers supported the bank’s 50 bps cut. But they remained uncommitted to the pace of future rate cuts. 

Smaller rate cuts bode poorly for gold and other non-yielding assets, given that they increase their opportunity cost. 

Other precious metals advanced on Thursday, but were also nursing steep losses. Platinum futures rose 1% to $969.75 an ounce, while silver futures rose 0.2% to $30.742 an ounce. 

Copper edges higher with focus on China stimulus 

Benchmark copper futures on the London Metal Exchange rose 0.6% to $9,749.50 a ton, while December copper futures rose 0.5% to $4.4355 a pound. Both contracts fell sharply this week, as recent monetary stimulus measures from China largely underwhelmed.

But Beijing outlined plans to dole out fiscal stimulus measures, with the Chinese finance ministry set to hold a briefing on Saturday to release more details. 

Investors have been clamoring for targeted, fiscal measures to boost growth in the world’s biggest copper importer. China is grappling with rampant deflation and a protracted property market crash.