Gold prices rise as Fed fears ease; Copper buoyed by China optimism

November 15, 2023 04:46 PM AEDT | By Investing
Follow us on Google News:

Investing.com-- Gold prices rose on Wednesday as softer-than-expected inflation data fueled bets that the Federal Reserve was done hiking interest rates, while copper prices rose on optimism over some economic resilience in China.

The yellow metal extended gains after marking its best intraday rise in over three weeks on Tuesday, as the dollar and Treasury yields fell sharply on the prospect of no more interest rate hikes by the Fed.

But bigger gains in gold were still held back by investors pivoting chiefly into risk-heavy assets, with stock and commodity logging stellar gains on Wednesday.

Gold prices were also nursing steep losses over the past week, as safe haven demand receded amid easing fears of the Israel-Hamas war.

Spot gold rose 0.2% to $1,966.32 an ounce, while gold futures expiring in December rose 0.2% to $1,970.00 an ounce by 00:31 ET (05:31 GMT).

US CPI misses expectations, Fed pause bets rise

The dollar languished at over two-month lows after data released overnight showed that U.S. consumer price index inflation grew less than expected in October.

While the reading was still above the Fed’s 2% annual target, it marked some easing in inflation after stronger-than-expected prints for August and September.

The reading sparked renewed bets that the Fed was done raising interest rates for the year, and will likely begin trimming rates by mid-2024. Such a scenario bodes well for gold, given that higher rates push up the opportunity cost of holding bullion.

But given that U.S. rates are set to remain higher for longer, any near-term gains in gold are likely to be limited.

Copper rises on China liquidity bump, positive data

Among industrial metals, copper prices advanced on Wednesday following a string of positive signals from major importer China, which pushed up expectations of steady copper demand in the country.

Copper futures expiring in December rose 0.3% to $3.6878 a pound.

While softness in the dollar aided copper prices, their chief source of support was improving sentiment towards China, after the People’s Bank injected about 600 billion yuan ($82.7 billion) of liquidity into the economy.

The injection was directed largely towards the banking system, and was intended to shore up lending conditions.

Chinese industrial production and retail sales data also beat expectations for October, highlighting some resilience in the economy.

This article first appeared in Investing.com


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.



Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK