Gold Prices and Industrial Metals Update

Gold prices rose slightly in Asian trade on Wednesday, recovering after a sharp drop in the previous session. The dollar steadied, with attention on a potential U.S. recession and lower interest rates.

Gold Market

Gold had initially benefitted from safe haven demand due to a hawkish Bank of Japan and U.S. recession fears, which caused significant losses in risk-driven assets, particularly stocks. However, markets began to rebound on Tuesday and Wednesday, which put pressure on safe haven assets.

• Spot gold rose 0.2% to $2,393.59 an ounce.
• Gold futures for December increased 0.1% to $2,433.70 an ounce by 00:47 ET (04:47 GMT).

Impact of Stock Market Rebound

Gold prices retreated sharply on Tuesday after nearing a new record high earlier this week, primarily due to a rebound in global stock markets. This rebound occurred due to a mix of bargain buying and hopes for a shallow U.S. recession that lured traders back to the markets. The anticipation of deeper interest rate cuts in the U.S., amidst recession fears, also bolstered risk appetite, which typically negatively impacts gold prices. Nonetheless, lower interest rates generally support gold due to reduced opportunity costs for investors.

Other precious metals also saw increases on Wednesday, recovering from previous losses:
– Platinum futures surged 1% to $928.95 an ounce.
– Silver futures rose 0.3% to $27.290 an ounce.

Copper Market

Conversely, copper prices experienced a pullback due to weakening Chinese import data.

• Benchmark copper futures on the London Metal Exchange fell 0.6% to $8,876.0 a ton.
• One-month copper futures dropped 0.1% to $4.0055 a pound.

Recent data showed that China’s copper imports fell 2.9% to 438,000 metric tons in July, reflecting weak demand in the world’s largest copper importer amid sluggish economic growth.

However, China’s overall imports exceeded expectations, indicating some resilience in domestic consumption. Still, the trade balance shrank more than anticipated as exports were affected by recent European trade tariffs on Chinese electric vehicles, potentially impacting copper demand in the EV industry.