Gold prices advanced in Friday’s Asian session, supported by a weakening U.S. dollar and solid expectations that the Federal Reserve will lower interest rates next week. Markets were also preparing for the release of a key inflation metric later in the day.

Spot gold added 0.5% to $4,227.88 an ounce at 02:28 ET (07:28 GMT), while February U.S. gold futures dipped 0.3% to $4,256.95.

Fed expectations lift gold; PCE data in focus

The U.S. Dollar Index hovered near a five-week low as traders increasingly priced in an 88% chance of a 25-basis-point rate cut at the Fed’s December 9–10 meeting. Hopes for additional easing in early 2025 also continued to build.

The softer dollar helped boost gold demand by reducing its cost for overseas buyers.

Recent U.S. data has pointed to a cooling labor market, strengthening the case for policy easing. Weekly unemployment claims dropped by 27,000 to 191,000 — their lowest level since September 2022 — while Wednesday’s ADP report showed a decline of 32,000 private-sector jobs, the steepest fall in more than two years.

Attention now shifts to the Fed’s preferred inflation barometer, the PCE price index, due later Friday. A weaker-than-expected figure could reinforce bets on further monetary easing. Still, rising U.S. Treasury yields remain a limiting factor, increasing the opportunity cost of holding non-yielding assets such as gold.

Broader metals rally; copper surges over 2%

A weaker dollar also lifted other precious and base metals.

Silver futures jumped 2.2% to $58.77 per ounce, and platinum futures gained 0.8% to $1,673.60.

Copper posted one of the strongest moves of the session: benchmark LME copper climbed 2.1% to $11,675.20 a ton, while U.S. copper futures rose more than 2% to $5.47 a pound.

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