Gold prices steady as Fed fears ease, copper rises on China stimulus

November 20, 2023 04:52 PM AEDT | By Investing
Follow us on Google News: Gold prices were muted on Monday, but retained a bulk of last week’s gains as easing concerns over rising U.S. interest rates pulled down the dollar.

Industrial metals saw strong gains, with copper prices rising 0.6% to a 1-½ month high on the prospect of more stimulus measures in major importer China.

A weaker dollar helped commodity prices across the board, as a string of weak labor and inflation readings over the past week saw traders betting that the Federal Reserve was done raising interest rates.

This notion pushed the dollar to an over two-month low, and also brought down Treasury yields.

Gold was a major beneficiary of this trade, with the yellow metal now once again coming within sight of the coveted $2,000 an ounce level. Gold prices rallied over 2% in the past week.

Spot gold was flat at $1,982.49 an ounce, while gold futures expiring in December steadied at $1,984.85 an ounce by 00:17 ET (05:17 GMT).

Fed rate cuts in focus, meeting minutes awaited

Traders were now pricing in the possibility that the Fed could begin cutting interest rates by as soon as March 2024, although CME’s Fedwatch tool only showed a 30% chance of such a scenario.

Near-term, markets were focused squarely on the minutes of the Fed’s late-October meeting, where the bank kept rates steady and signaled that it will likely keep rates higher for longer.

Still, the central bank is now almost unanimously expected to no longer raise interest rates, as weak inflation and labor data showed that the U.S. economy was cooling as expected.

But the prospect of rates remaining higher for longer bodes poorly for gold prices, given that high rates push up the opportunity cost of investing in bullion. This notion is expected to limit any major gains in gold over the coming months.

Copper rallies on China stimulus hopes

Copper prices rose to an over one-month high on Monday after Chinese officials vowed to roll out more policy support for the country’s beleaguered real estate sector, which is a key driver of copper demand.

Copper futures jumped 0.6% to $3.7557 a pound- their highest level since early-October.

China’s central bank kept its benchmark loan prime rate at record lows, as it moved to foster a local economic recovery. The bank also injected about 80 billion yuan of liquidity into the economy, largely maintaining its pace of cash injections to support growth.

The move heralds some improvement in copper demand, especially if economic growth in the world’s largest copper importer picks up.

This article first appeared in


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