Investing.com– Gold prices steadied in Asian trade on Thursday after clocking strong overnight gains as some soft inflation data pulled the dollar to one-month lows and pushed up expectations of interest rate cuts. 

The yellow metal was now back in sight of record highs hit in May, as traders increased bets that the Federal Reserve will begin cutting rates by as soon as September. The dollar fell sharply on Wednesday on this notion, which in turn benefited broader metal prices. 

rose 0.1% to $2,388.84 an ounce, while expiring in June steadied at $2,393.50 an ounce by 23:43 ET (03:43 GMT). 

Gold surges as CPI eases, rate cut bets increase 

Gold prices were sitting on an over 1% bounce from Wednesday after data showed U.S. inflation eased in April from March, while also fell from the prior month.

The readings, which were followed by softer-than-expected data, pushed up hopes that inflation will ease in the coming months, giving the Fed more confidence to begin trimming rates.

The showed traders pricing in a greater chance of a 25 basis point cut in September, at nearly 54%. 

High rates push up the opportunity cost of investing in gold and other precious metals, given that they offer no direct yield. The yellow metal may also benefit from increased safe haven demand if the U.S. economy cools further this year. 

Still, a slew of Fed officials warned over the past week that the central bank needed more confidence that inflation was going down. Inflation also remained comfortably above the Fed’s 2% annual target. 

Other precious metals also advanced. rose 0.5% to $1,081.90 an ounce, while rose 0.2% to $29.797 an ounce. 

Copper prices sit at 2-year high on China hopes 

Among industrial metals, copper prices pushed higher on Thursday and remained at over two-year peaks amid persistent optimism over more fiscal stimulus in China, as well as increased support for the property market.

on the London Metal Exchange rose 1% to $10,375.0 a ton, while rose 1.4% to $4.9915 a pound. Both contracts were close to highs seen in April 2022. 

Beijing said it will begin a massive, 1 trillion yuan ($138 billion) bond issuance this week, while several major cities also relaxed restrictions on home buying to support the property market. 

Chinese and data, due Friday, is now awaited for more cues on the world’s biggest copper importer.