Gold prices remain near record levels ahead of key U.S. data

Investing.com-- Gold prices edged higher Thursday, trading near record highs, buoyed by raised geopolitical tensions and expectations of lower Federal Reserve interest rates.

At 08:15 ET (12:15 GMT), Spot gold was up 0.4% at $3,750.52 an ounce, after retreating from Tuesday’s all-time peak of $3,790.82/oz, while U.S. Gold Futures for December rose 0.3% to $3,780.50 an ounce.

The yellow metal settled 0.7% lower on Wednesday as the dollar rebounded overnight, making gold more expensive for buyers using other currencies.

Gold looks to key U.S. data

Investors are awaiting a string of U.S. economic reports this week, expected to provide clearer signals on whether the central bank will move ahead with further rate cuts this year, following the Fed;s rate cut, its first this year, earlier this month.

Lower interest rates reduce the opportunity cost of holding non-yielding assets such as bullion, making gold more attractive to investors.

Weekly jobless claims, due later on Thursday, are expected to come in around 230,000. The government’s second estimate of second-quarter GDP will also be released on Thursday. 

The August core Personal Consumption Expenditures (PCE) price index, due Friday, is expected to rise about 2.7% from a year earlier, remaining above the Fed’s 2% target.

The precious metal has also benefited from its traditional status as a haven asset during times of uncertainty, and investors face no shortage of reasons for caution. Ongoing conflicts in Ukraine and the Middle East, persistent inflationary concerns, and political risks in the U.S. have all contributed to the rally.

Copper gains after Freeport force majeure

Elsewhere, Silver Futures edged 2.1% higher to $45.13 per ounce, while Platinum Futures gained 2.9% to $1,526.25/oz.

Benchmark Copper Futures on the London Metal Exchange rose 0.1% to $10,373.50 a ton, and U.S. Copper Futures climbed 0.6% to $4.8420 a pound, adding to the previous session’s strong gains.

LME copper surged on Wednesday after Freeport-McMoRan declared force majeure, meaning it would be unable to fulfil contracts to customers from its giant copper mine in Indonesia due to forces beyond its control.

"Operations at Freeport’s Grasberg mine, which is the world’s second-largest copper mine, were halted nearly three weeks ago after a fatal mudslide in which at least two people died," said analysts at ING, in a note.

"The mine accounted for around 3% of global copper supply this year (prior to the disruptions), nearly 30% of Freeport’s copper output and 70% of its gold production, underscoring the scale of the impact."

Ayushman Ojha contributed to this article