Commodities Gold and Copper Hit 2-Week Highs, Copper Firms as Dollar Recovers

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By Ambar Warrick– Gold prices traded near their highest level in two weeks on Thursday, with metal markets rallying as the dollar retreated on growing expectations that the Federal Reserve will soften its hawkish stance this year. 

1.1% increase to $1,666.79 per ounce. This briefly surpassed the $1,675.03 mark two weeks ago. Then, it traded at $1,670.80 per ounce, just below the two-week peak. 

Bullion prices rose nearly 1% on Wednesday and are now up for the third consecutive session. The gains have put the yellow metal in sight of the $1,700 mark, which is its next major hurdle. 

After falling more than 1% in its previous session, the Fed fell 0.1% on Thursday. Investors bet that a slowdown of U.S. economic expansion will cause it to slow down its rate of interest rate increases this year. Treasury yields also fell.

The greenback is trading at its weakest point in over a month, just 5% below its September 20-year high. 

The markets almost unanimously expect that the Fed will raise rates in November, but there is growing expectation that it will do so in December. 

Traders are currently pricing in a nearly 60% chance for a 50 bps hike in the Fed’s last meeting this year. 

An upcoming Fed that is less hawkish was a relief for gold prices. This was especially important considering the fact that rising interest rates have severely reduced gold’s appeal.

Even if the Fed adopts a more hawkish stance, U.S. rates are expected remain high until at most 2024. This will keep gold prices down. 

Copper prices fell on Thursday, after rising more than 4% during the previous session. 

Three-week high of $3.540 per pound. The red metal saw a weak start due to concerns about China’s slowing demand. However, it also gained from the possibility that there will be shortages in the months ahead.

Copper demand is expected to rise as electrification gains traction over the next few years.


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