Gold prices rise as Trump trade cools ahead of inflation data

Investing.com– Gold prices rose in Asian trade on Wednesday, recouping a measure of recent losses as a rally in the dollar, on a Donald Trump election win, paused before inflation data that is likely to factor into interest rates. 

The yellow metal was nursing a sharp tumble from record highs over the past few weeks, as Trump’s election win sparked a major risk-on rally across global financial markets. Recent losses saw spot gold hit a near two-month low on Tuesday.

Spot gold rose 0.5% to $2,609.90 an ounce, while gold futures expiring in December fell 0.4% to $2,615.70 an ounce by 23:16 ET (04:16 GMT). 

Gold nurses recent losses, CPI in focus 

The yellow metal appeared to have steadied from recent losses, with focus turning to upcoming consumer price index inflation data for more cues on interest rates.

The reading is expected to show inflation remained sticky in October, which bodes poorly for bets on sustained monetary easing by the Federal Reserve.

Trump’s election victory added to uncertainty over the inflation outlook. The president-elect is widely expected to roll out more expansionary policies during his second term, presenting a heightened outlook for inflation and interest rates. 

Broader precious metals also rose on Wednesday, recouping some recent losses. Platinum futures rose 0.7% to $960.10 an ounce, while silver futures rose 1.1% to $31.108 an ounce. 

Kashkari warning spurs rate anxiety, Fedspeak in focus 

Uncertainty over interest rates was furthered by a warning from Minneapolis Fed President Neel Kashkari, who said that any increases in inflation could see the Fed pause its rate cutting spree.

The central bank cut interest rates by a total 75 basis points in the past two months, and is expected to cut rates by 25 bps in December.

Traders slightly trimmed bets on a December cut after Kashkari’s comments, CME Fedwatch showed.

Several more Fed officials are set to speak this week, most notably Chair Jerome Powell on Thursday. 

Copper nurses China losses

Among industrial metals, copper prices fell slightly on Wednesday, and were nursing sharp losses in recent sessions as new fiscal measures from top importer China largely underwhelmed.

Benchmark copper futures on the London Metal Exchange fell 0.1% to $9,137.50 a ton, while December copper futures fell 0.2% to $4.1390 a pound. 

China approved a 10 trillion yuan ($1.4 trillion) debt package to support local governments. But traders were disheartened by a lack of targeted measures to support consumption and the property market. 

Analysts said Beijing was likely seeking more clarity on what a Trump presidency will entail for the country, before approving more fiscal measures. Trump has vowed to impose steep import tariffs on China.