Gold prices steady after strong November gains, Powell in focus

Investing.com-- Gold prices steadied near a seven-month high on Friday, pausing their recent rally amid anticipation of more cues on U.S. interest rates from Federal Reserve Chair Jerome Powell later in the day. 

A swathe of middling purchasing managers index (PMI) readings from across Asia also kept safe haven demand for the yellow metal largely elevated, amid growing concerns over a looming economic slowdown.

Gold was sitting on strong gains in November, as markets grew convinced that the Federal Reserve will raise interest rates no further, and will begin trimming rates in 2024. But the timing of the potential interest rate cuts remained a key point of uncertainty for markets.

Spot gold rose 0.3% to $2,041.35 an ounce, while gold futures expiring in December rose 0.2% to $2,041.30 an ounce by 00:57 ET (05:57 GMT). Both instruments clocked strong gains in November, with spot prices less than $40 away from a record high.

Powell set to offer more cues before December Fed meeting 

Powell is set to speak at two separate events later on Friday. While the Fed Chair has largely maintained his stance that rates will remain higher for longer, markets were looking for any changes in his stance after dovish cues from a string of Fed officials earlier this week. 

They also acknowledged that U.S. inflation had fallen substantially in recent months, and that further declines in inflation were likely to invite early interest rate cuts by the central bank. 

But while U.S. inflation eased in recent months, it still remained well above the Fed’s 2% annual target. This was seen in PCE price index data released on Thursday, which in part contributed to the dollar’s rebound. 

Powell's comments will be the Fed Chair's final word before a two-week blackout period in anticipation of a mid-December Fed meeting. The central bank is widely expected to keep rates on hold. 

Copper prices steady after strong November

Among industrial metals, copper prices steadied on Friday after clocking strong gains in November, amid some improving economic trends in China and expectations of tighter supplies.

Copper futures expiring March were flat at $3.8515 a pound, after rallying 5.5% in November. 

A private survey showed on Friday that China’s manufacturing sector unexpectedly grew in November. But the reading contrasted with a government survey earlier this week, which showed the sector remaining in contraction. The readings offered mixed cues on the world’s largest copper importer, which is struggling with a sluggish economic recovery this year.

On the supply front, however, mine closures in Peru and Panama are set to tighten copper markets in the coming months.