Investing.com - Nickel and zinc prices came under fire Tuesday on rising trade tensions and a steep slide in steel prices on expectations for higher inventories as China reportedly curbed its output-cut plans.
Steel rebar futures fell sharply, pressuring nickel, mostly used to make stainless steel, and zinc, mainly used for galvanizing steel, to eight-month and three-week lows, respectively, amid reports China could allow northern provinces to set their own production curbs over winter.
The steep drop in nickel and zinc was part of a wider move lower in metals as investors fretted about the impact on commodity demand amid little sign of an end to the U.S.-China trade war.
China told the World Trade Organization (WTO) Tuesday it wanted to impose $7 billion a year in sanctions on the United States, citing Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.
Precious metals, meanwhile, traded mostly up, but gains were kept in a check by a stronger dollar, which followed bullish labor market numbers.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose by $2.80, or 0.23%, to $1,202.60 troy ounce.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose 0.07% to 95.19, from a session low of 94.84.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
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