Gold Prices Jump on Safe Haven Demand, Copper Sinks 1%
2022.08.02 05:02
By Ambar Warrick
Investing.com– Gold prices rose on Tuesday as signs of weakening economic activity across the globe drove demand for the safe haven, while copper prices extended losses into a third consecutive day.
As of 2045 EST (1244 GMT), spot gold prices rose nearly 0.4% to $1,778.59 an ounce- their highest level in nearly a month. Gold Futures expiring in December were trading up more than 0.4%, and were close to breaking above $1,800.
The yellow metal has received a significant boost to demand in recent sessions, rising for four out of the past five amid signs of worsening economic conditions.
Weak U.S. GDP data had triggered safe haven buying into gold last week, with a surprise contraction in Chinese factory activity furthering the case for the precious metal on Monday. Gold prices added 0.6% at the beginning of the week.
Manufacturing readings from the United States and the Eurozone also disappointed markets, increasing concerns over slowing economic growth.
Among other precious metals, Platinum Futures rose 0.3% to $906.55, while Silver Futures dipped slightly.
On the other hand, Copper Futures expiring in September plunged 1% to $3.4955, as a decline in manufacturing activity pointed to weak demand for the red metal.
The metal is set for a third straight day of losses, and has lost over 3% since Friday. Copper is particularly sensitive to manufacturing trends, given its use in a wide variety of industrial applications.
A bulk of the pressure on copper prices is coming from signs of weakening activity in China, which is the world’s largest importer of the metal.
Aluminium futures were also dented by the Chinese data, with London-traded futures of the metal down 1.6% on Monday. Singapore-traded Iron ore fines 62% Fe CFR Futures futures dropped 0.5%.
But other industrial metals fared far better. U.S.-traded Nickel Futures jumped over 2% to $24,344 on expectations that a broader switch to electric vehicles will drive more demand for the metal.
Nickel is a key component in the lithium ion batteries used in electric vehicles. Positive auto sales from India- the fifth largest car market by sales, also helped boost the outlook for nickel.
