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Gold Prices Hold Steady with PCE Data in Focus; Copper Slips on Weak China

In Asian trade on Friday, gold prices maintained stability as traders remained cautious ahead of crucial U.S. inflation data, which is expected to influence the outlook for interest rates.

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Meanwhile, copper prices slipped in response to weaker-than-expected purchasing managers index (PMI) data from China, the top importer of the metal.

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Gold Market Update

Spot gold steadied at $2,342.86 per ounce, while gold futures expiring in August edged down by 0.1% to $2,363.80 per ounce by 00:19 ET (04:19 GMT). Despite this slight decline, the yellow metal was poised to register a gain of approximately 2.6% for the month of May, after reaching record highs earlier in the month.

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However, gold was currently trading approximately $100 below its May peak, as concerns regarding sustained high U.S. interest rates prompted some profit-taking in the precious metal.

The focus now shifts to the Personal Consumption Expenditures (PCE) price index data, the Federal Reserve’s preferred measure of inflation, which is scheduled for release later on Friday. Market participants anticipate that the data will show a slight cooling of inflation in April but still remain well above the Fed’s 2% annual target range.

Persistently high interest rates pose a challenge for gold and other precious metals, as they increase the opportunity cost of holding non-yielding assets like gold.

Platinum and Silver Performance

Other precious metals experienced declines on Friday, partly due to profit-taking following robust gains throughout May. Platinum futures fell by 0.6% to $1,028.95 per ounce, while silver futures slid by 1.6% to $31.030 per ounce. Despite these declines, both metals recorded significant gains of 9% and 17%, respectively, during May, benefiting from speculative activity that drove up industrial metal prices.

Platinum and silver, which also have industrial applications, were buoyed by the speculative frenzy observed in the industrial metals market.

Copper Market Overview

In the copper market, benchmark copper futures on the London Metal Exchange remained steady at $10,141.0 per tonne, while one-month copper futures dipped by 0.5% to $4.6350 per pound. Despite reaching record highs earlier in May, both contracts saw significant profit-taking as speculative activity subsided.

Sentiment towards copper was further dampened by weaker-than-expected PMI data from China, where the manufacturing sector unexpectedly contracted in May, while non-manufacturing activity expanded at a slower pace. China’s status as a top copper importer contributed to the negative market sentiment.

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