Gold steady, Copper Rises Amid Smaller Rate Hike Expectations

Gold prices steadied on Wednesday, while copper extended strong gains as risk-driven assets rallied on expectations that the Federal Reserve will hike interest rates at a slower pace in the near-term, which also trimmed dollar gains. A growing number of Fed officials said in recent weeks that the central bank is likely to raise interest rates by a relatively smaller margin – 50 basis points (bps) – in December. This spurred a growing amount of bets that U.S. inflation has peaked, and that the central bank will eventually taper its pace of interest rate hikes further. Such a scenario is positive for metal markets, which were battered by rising interest rates this year. An improvement in


But Kansas City Fed President Esther George Warned.

Tuesday that interest rates could stay higher for longer in order to bring down inflation Рa scenario that is expected to weigh on metal markets next year. While gold has pared a bulk of its losses this year, the yellow metal is still trading well below the two-year highs hit earlier this year. The metal also largely failed as an inflation hedge, and relinquished its safe haven status to the dollar. The greenback trimmed some of its recent gains on Wednesday, falling from a two-week high. Among industrial metals, copper prices extended gains on Tuesday, recovering further from a 10-day low amid a broader rally in risk-driven assets. Copper futures rose 0.2% to $3.6290 a pound. Prices of the red metal fell sharply last week amid concerns over growing COVID-19 cases in China, which hampered economic activity and dented the country’s demand for commodities. But the red metal is also set to benefit from tightening supply, amid disruptions in major producers Chile and Peru. U.S. sanctions against major Russian suppliers of the metal are also expected to curb production.

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Dollar Down as Fed Minutes, U.S. Data Weighs

The U.S. dollar fell across the board on Wednesday, after minutes from the Federal Reserve’s November meeting showed that most policymakers at the central bank agreed it would soon be appropriate to slow the pace of interest rate hikes. The readout of the Nov. 1-2 meeting, at which the Fed […]
Dollar down

You May Like

Subscribe US Now

Error: Your Requested widget " newsletterwidget-2" is not in the widget list.
  • [do_widget_area fullwidth-homepage-sidebar]
    • [do_widget_area sidebar-1]
      • [do_widget id="search-2"]
      • [do_widget id="recent-posts-2"]
      • [do_widget id="archives-2"]
      • [do_widget id="categories-2"]
    • [do_widget_area widgets_for_shortcodes]
      • [do_widget id="newsletterwidget-2"]
    • [do_widget_area wp_inactive_widgets]