Gold prices fell slightly in Asian trade on Friday, but were sitting on strong gains from the prior session as softer-than-expected U.S. inflation data ramped up bets on a September interest rate cut.

The yellow metal blew past the closely-watched $2,400 an ounce level on Thursday and was less than $50 away from a record high, as it benefited from a sharp drop in the dollar. Gold was also set for a strong weekly performance.

Spot gold fell 0.3% to $2,408.52 an ounce, while gold futures expiring in August fell 0.3% to $2,413.75 an ounce by 00:06 ET (04:06 GMT). 

Gold heads for weekly gains amid rate cut cheer 

Spot prices were set to add about 0.7% this week, with a bulk of gains coming on Thursday. 

Consumer price index data released on Thursday read a touch lower than expected, driving up hopes that cooling inflation will give the Fed more confidence to begin cutting rates.

The dollar and Treasury yields sank on this notion, benefiting metal markets. Traders were seen pricing in an over 82% chance for a 25 basis point cut in September, up from last week’s chances of about 64%. 

Lower interest rates reduce the opportunity cost of investing in non-yielding assets such as gold, given that high rates make yields on cash or debt much more attractive. 

Other precious metals retreated on Friday, but were also set to benefit from lower rates.

Platinum futures fell 0.4% to $1,015.10 an ounce, while silver futures fell 0.7% to $31.457 an ounce. 

Copper dips as China imports shrink 

Among industrial metals, copper prices retreated on Friday as data showed imports to China, the world’s biggest copper importer, shrank in June.

Benchmark copper futures on the London Metal Exchange fell 0.3% to $9,761.50 a tonne, while one-month copper futures fell 0.7% to $4.4977 a pound. 

China’s imports of unwrought copper and copper products fell 3% year-on-year to 436,000 metric tons in June, government data showed on Friday. 

The reading came as broader Chinese imports unexpectedly shrank in June, fueling concerns over weak local demand and a sluggish economic recovery in the country. 

China’s trade surplus surged to a near two-year high, while exports also grew more than expected. But increased trade tariffs on key Chinese exports, such as electric vehicles, could offset this trend. 

Focus is now on the Third Plenum of the Chinese Communist Party for more cues on the economy and stimulus. The meeting is set to take place next week.