Copper and Gold Prices Rise Amid Shifts in Market Dynamics
Copper and gold prices saw upward momentum on Friday, driven by developments in global production and demand as well as broader economic conditions.
On the London Metal Exchange (LME), three-month copper contracts rose to $8,914 per tonne, marking a 0.4% increase. This gain was supported by a 1.6% decline in China's refined copper production in November, down to 1.13 million tonnes, as reported by Kedia Advisory. China’s dual role as the world’s largest consumer and a significant producer of copper means production slowdowns often lead to tighter global supplies. Additionally, Chinese copper imports surged to a one-year high of 528,000 tonnes in November, a 4.3% increase from October. Restocking and lower prices were cited as primary drivers for this demand boost.
Despite these gains, copper’s upward trajectory could face resistance as market sentiment remains cautious following the US Federal Reserve’s decision to slow the pace of interest rate cuts in 2025. On Wednesday, the Fed implemented a 25-basis-point rate cut, but signaled a more measured approach moving forward.
Gold prices also rose in early Asian trade, supported by safe-haven demand amid uncertainty over US fiscal policies. The most-active February gold contract on COMEX climbed to $2,614.1 per ounce, up 0.2%. Concerns about a looming US government shutdown intensified after a spending bill failed in the House of Representatives. Additionally, gold prices recovered from a previous decline following the Federal Reserve’s cautious stance on future rate cuts.
However, gold's near-term performance might be tempered by weakening physical demand in India. Analysts at ANZ, quoted by Dow Jones, highlighted expectations of reduced gold imports in December due to a lack of major festivals and other factors.
Market participants are closely monitoring the release of US personal consumption expenditure data for further economic cues, which could influence both copper and gold markets in the coming days.
