Gold faces resistance at $1,780, copper sinks on China woes
2022.11.16 21:41
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Gold faces resistance at $1,780, copper sinks on China woes
Budrigannews.com – Gold prices fell from a key resistance level on Thursday as the metal’s safe haven demand diminished on waning fears of an escalation in the Russia-Ukraine conflict, while copper prices fell further on concerns over a COVID outbreak in China.
Bullion prices also saw an element of profit taking after strong gains in four of the past five sessions, and still traded near a three-month high.
fell 0.3% to $1,773.88 an ounce, while were unchanged at around $1,777.0 an ounce by 17:00 ET (00:00 GMT). Waning fears of a potential escalation in the Russia-Ukraine conflict also sapped safe haven demand for the metal, after NATO members said a missile that killed two people in Poland was defending themselves against a Russian missile barrage.
Prices of the yellow metal rallied in recent sessions as the dollar retreated on expectations of a less hawkish Federal Reserve, especially as softer-than-expected U.S. pointed to easing price pressures.
A slew of Fed members also said they supported smaller rate hikes to avoid a potential recession. Markets are now pricing in an that the Fed will hike rates by a relatively smaller 50 basis points in December.
Rising interest rates were the biggest weight on gold prices this year, as higher yields pushed up the opportunity cost of holding the yellow metal. But analysts said that the metal may see better prospects thanks to easing U.S. inflation.
“Pullbacks have been minimal, and pressure remains to the upside. A break of $1,780 could be the catalyst for another spike and ease any doubts about the sustainability of the rally in the process. Assuming both U.S. inflation releases haven’t done that already,” analysts at Oanda wrote in a note.
The steadied on Thursday and kept to a tight range as investors awaited more cues on the U.S. economy.
Among industrial metals, copper prices were flat on Thursday after a 1.6% drop in the prior session, amid continued concerns over slowing economic growth in major consumer China.
were flat at $3.7575 a pound, and remained pressured by fears that a new COVID-19 outbreak in China will further dent economic activity.
Weaker than expected economic readings from China this notion, as the country grapples with its worst COVID-19 outbreak in six months.
This has largely offset signs of tightening copper supply, caused by disruptions in major producers Chile and Peru.
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