Copper futures increased by almost 4% on Thursday. With the gains, copper is now on track to post a weekly rise of more than 4%. The mine’s 44-day strike in 2017 caused a serious shortage of copper, which in turn drove up prices. On Friday, copper futures were unchanged. Copper prices were poised for a significant weekly increase due to fears over supply due to a strike at Chile’s Escondido mine. Following a vote by unionized workers at Chile’s Escondido, the largest copper mine in the world, to strike over safety issues.
On concerns that China, the world’s top copper importer, may experience a slowdown in demand, the red metal’s prices have plummeted precipitously this year. Data released earlier this week revealed a decline in China’s trading activity in August despite robust purchases of copper. However, as economic growth slows, traders worry that demand will eventually slow down. Although gold prices were stable on Friday, this week’s gains were undone by the Fed’s aggressive remarks.
Spot gold rose 0.1% to $1,710.25 an ounce.while gold futures inched up to $1,721.15 an ounce. Both instruments were set to lose about 0.1% for the week, their fourth consecutive weekly loss. Bullion prices slipped on Thursday after Fed Chair Jerome Powell reiterated the central bank’s hawkish stance during an address at the Cato Institute’s annual monetary conference.
Powell vowed that the Fed would keep tightening policy aggressively until inflation was within its 2% target. His comments kept the dollar pinned near 20-year highs, despite pressure from the euro after a bigger-than-expected rate hike by the European central bank. Powell’s statements also saw traders strengthen their forecasts that the Fed will raise rates by 75 basis points this month. Markets are currently pricing in an over 85% possibility of the raise.
This week, a rising dollar and rising rates knocked the shine off the yellow metal as concerns over a hawkish Fed caused gold prices to drop almost to 2022 lows. For as long as the Fed keeps raising interest rates, this pressure is anticipated to persist.