Gold sticks to $1,800, copper boosted by China COVID reopening
2022.12.04 19:52
© Reuters.
By Ambar Warrick
Investing.com– Gold prices were steady on Monday despite stronger-than-expected U.S. jobs data indicating more potential interest rate hikes, while copper prices rose as more Chinese cities relaxed COVID-19 restrictions, raising hopes for a full reopening.
While U.S. grew more than expected in November, markets appeared to be sticking to the that interest rates will rise at a slower pace in the coming months.
The also appeared to have taken little support from the jobs reading, and was trading at a five-month low, while hovered at over two-month lows.
Bullion prices are expected to recover further in the coming months as the Fed’s interest rate hikes slow. But uncertainty over the path of U.S. inflation, as well as the Fed’s terminal rate, is still expected to spur volatility in the market.
rose 0.1% to $1,800.10 an ounce, while rose 0.2% to $1,813.40 an ounce, with both instruments trading at a near four-month high.
Other precious metals were buoyed by bets on a less hawkish Fed. rose 0.6%, while added 0.9%. Precious metal markets logged deep losses this year as rising U.S. interest rates pushed up the opportunity cost of holding non-yielding assets.
This cost gold its safe haven status, and has seen the yellow metal trade more in line with traditional risk-driven assets this year.
Sentiment in recent sessions was also supported by more Chinese cities over the weekend. Economic hubs including Beijing and Shanghai both relaxed some movement and testing measures, as the government sought to placate a wave of unprecedented protests against its strict zero-COVID policy.
Reuters also reported that the government is gearing up to announce a nationwide easing of restrictions in the coming weeks.
Industrial metals rose sharply on the prospect of a broader Chinese reopening, given that the country is one of the biggest commodity importers in the world.
rose 0.4% to $3.8718 a pound after rallying more than 6% last week. Prices of the red metal were also trading at a three-week high.
Copper demand is forecast to skyrocket on a Chinese reopening, while supply tightened in recent months on lower production from major miners in Chile and Peru.
