Investing.com– Gold prices steadied in Asian trade on Friday, but were nursing their worst weekly performance in over three years as strong U.S. inflation and less dovish signals from the Federal Reserve sparked doubts over lower interest rates.
The yellow metal was also battered by a risk-on rally in the wake of a Donald Trump victory in the 2024 presidential election. Markets were also uncertain over the outlook for interest rates under Trump.
rose 0.2% to $2,569.47 an ounce, while expiring in December rose 0.1% to $2,574.05 an ounce by 23:40 ET (04:40 GMT).
Gold set to lose over 4% this week
Spot gold was trading down about 4.3% this week, its worst performance since June 2021. The yellow metal had initially tumbled from record highs after Trump’s election victory ramped up risk appetite last week.
Losses deepened this week as the shot up to one-year highs amid increasing uncertainty over the near-term outlook for interest rates.
U.S. and inflation read sticky for October, while comments from Federal Reserve officials suggested the central bank was more cautious over cutting interest rates further.
Fed Chair Jerome Powell said resilience in the U.S. economy meant the central bank could take its time to cut rates further. His comments saw traders pare expectations for a December rate cut.
Traders were seen pricing in a 61% chance for a 25 basis point rate cut in December, down from an 85.7% chance seen on Thursday. Traders also saw a 39% chance rates will remain unchanged, showed.
The prospect of higher-for-longer rates bodes poorly for gold and other precious metals. Expectations of more inflationary policies under Trump also saw traders bracing for higher long term rates.
rose 0.3% to $946.70 an ounce, while rose 0.1% to $30.610 an ounce on Friday. Both metals were also nursing steep losses this week.
Copper prices rise after China data, but nurse steep weekly loss
Among industrial metals, copper prices rose following some mixed economic readings from top importer China. But prices of the red metal were nursing steep losses for the week after stimulus measures from the country largely underwhelmed.
Benchmark on the London Metal Exchange rose 0.3% to $9,056.50 a ton, while December rose 0.5% to $4.0968 a pound. Both contracts were down between 4% and 5% this week, their worst drop since early-July.
Data on Friday showed little improvement in the Chinese economy, as grew less than expected in October, as did .
But were a bright spot, rising more than expected on the Golden Week holiday.