Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Gold prices steady before Fed meeting; copper rallies higher

Published 03/15/2024, 01:43 AM
Updated 03/15/2024, 01:43 AM
© Reuters. Gold prices moved little in Asian trade on Friday as stronger-than-expected inflation data spurred more fears that the Federal Reserve will signal higher-for-longer interest rates at an upcoming meeting. 

But this sentiment did little to deter a rally in copper prices, which surged to new 11-month highs on Friday as expectations of substantially tighter Chinese supplies spurred heavy buying in the red metal. 

Bullion prices, on the other hand, were pressured by a stronger dollar. The greenback rose to an over one-week high after strong inflation readings this week, while traders also positioned for an upcoming Fed meeting

Spot gold rose 0.1% to 2,163.98 an ounce, while gold futures expiring in April steadied at $2,168.05 an ounce by 01:17 ET (05:17 GMT). 

Gold nurses tumble from record high as Fed meeting approaches 

Gold prices were set for weekly losses after falling sharply from record highs hit on Monday.

Pressure on the yellow metal came chiefly from growing angst over a Fed meeting next week, especially as consumer and producer inflation signals read stronger than expected for a third straight month.

Sticky inflation saw traders grow fearful of any hawkish signals from the Fed, especially as the central bank signaled that its plans for interest rate cuts in 2024 will be largely dictated by the path of inflation. Higher-for-longer rates bode poorly for gold and other non-yielding assets.

Still, ANZ analysts said in a recent note that while gold may see some weakness in the near-term, the yellow metal still had a slew of factors working in its favor for the rest of the year. They also hiked their 2024 target price for gold to $2,300 an ounce from $2,200 an ounce. 

Other precious metals rose on Friday and were set to outperform gold for the week. Platinum futures rose 0.2% to $932.50 an ounce, while silver futures rose 0.6% to $25.212 an ounce.

Copper prices rally to 11-mth highs on China supply shortage

Three-month copper futures on the London Metal Exchange surged 1.5% on Friday and crossed the $9,000 a ton level for the first time since April 2023. One-month U.S. copper futures jumped 1.3% to $4.1022 a pound- a 11-month high.

Both contracts were set to add over 5% this week- their best weekly gain so far in 2024. 

Copper’s rally was triggered chiefly by media reports stating that major Chinese copper smelters were planning to carry out joint production cuts, limiting the supply of refined copper.

Citi analysts said that the copper rally still had legs, and that they were overweight on copper with a potential upside of up to $9,500 a ton by June 2024.

Latest comments

Commodities play a significant role in the global economy.
Financial institutions face increasing regulatory pressure.
chinese smelters don't need so much copper, so the price traders created a copper rally. Ok.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.