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

Investing.com-- 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.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.8% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: