Gold prices ticked up in Asian trading on Friday, poised for a weekly gain as a slight dip in the dollar provided support. However, the dollar remained near its two-year peak, keeping pressure on bullion.
Spot gold rose 0.2% to $2,662.94 per ounce, while February gold futures climbed 0.3% to $2,677.70 an ounce as of 00:05 ET (05:05 GMT).
Gold Set for Weekly Gain, but Strong Dollar Caps Momentum
The yellow metal is on track for a nearly 2% gain this week, marking its strongest weekly performance since November 17, following two weeks of declines.
The U.S. Dollar Index slipped 0.2% during Asian trading hours on Friday but stayed close to its two-year high from last month. Similarly, U.S. Dollar Index Futures also edged lower.
A weaker dollar often boosts gold prices by making the metal more affordable for buyers using other currencies.
As 2025 begins, markets remain cautious due to the Federal Reserve’s indication of only two more interest rate cuts this year. Higher interest rates typically weigh on gold prices by increasing the appeal of yield-bearing investments over non-yielding assets like gold.
Other Precious Metals Gain
Other precious metals saw modest gains on Friday. Platinum futures rose 0.5% to $929.70 an ounce, while silver futures edged up 0.4% to $30.30 an ounce.
Copper Struggles Amid Dollar Strength and China Stimulus Uncertainty
Industrial metals like copper remained under pressure, as a strong dollar and lackluster Chinese manufacturing data weighed on the market.
Although Chinese factory activity expanded in December, it did so at a slower-than-expected pace, according to Thursday’s data. This suggests diminishing effects of previous stimulus measures, with markets eagerly awaiting clearer guidance on Beijing’s stimulus plans for 2025.
The People’s Bank of China announced plans to cut interest rates from the current 1.5% “at an appropriate time” this year, according to a report from the Financial Times on Friday.
Benchmark copper futures on the London Metal Exchange edged up 0.2% to $8,815.50 per ton, while February copper futures slipped 0.2% to $4.0260 per pound.
