At around 5:15 p.m., an ounce of gold was trading at $1,745.98, up from $1,811.43 the previous Friday at the end of the session.
Copper prices on the London Metal Exchange (LME) fell during the week, weighed down by fears of a slowing global economy, hitting their lowest level in a year and a half on Wednesday.
“Concerns about the looming risk of a recession have caused commodity prices to fall sharply, with copper prices hitting their lowest level since November 2020 on Wednesday at $7,291.50 per tonne,” commented Michael Hewson, analyst at CMC Markets.
Copper is heavily used in industry, particularly to make electrical circuits, and is known for reflecting the health of the world economy, hence the nickname Doctor Copper.
The red metal is therefore very sensitive to a possible slowdown in global economic activity and serves as an economic barometer.
Copper is down more than 20% year-to-date.
Carsten Fritsch, an analyst at Commerzbank, cites “fears of a gas crisis in Europe, an economic slowdown in the United States, new cases of coronavirus and possible restrictions in China” as the factors thinking about base metals.
Several million people are locked down in China as the epidemic breaks out again, raising fears of a return of restrictions, particularly in Shanghai, a month after a long and grueling confinement was lifted.
Copper prices recovered slightly on Thursday and Friday. A recovery triggered “by a report that the Chinese government is planning another economic stimulus package,” said Carsten Fritsch.
However, analysts at Commerzbank remain “skeptical” that this recovery “marks a turning point.”
As of 15:15 GMT (17:15 Paris) on the London Metal Exchange, a tonne of copper for three-month delivery was trading at $7,813.00 on Friday, versus $8,048.00 on Friday’s close seven days earlier. .
Gold prices hit their lowest level since September on Wednesday and failed to recover at the end of the week, penalized by the dollar’s strength and the prospect of tighter monetary policy in the United States.
The appreciation of the greenback, the reference currency of the gold market, makes the precious metal more expensive and therefore less attractive for investors using other currencies.
“Increasing expectations of a Fed (Federal Reserve) rate hike are weighing on gold,” said Han Tan, an analyst at Exinity Group.
Along with the dollar’s appreciation, a tighter Fed makes Treasuries more profitable and makes these safe havens more attractive to investors than gold.
However, as markets increasingly anticipate a recession in both the United States and Europe, gold could again benefit from investor concerns, some analysts are betting.
For example, Goldman Sachs writes that “recession risks in the United States and Europe are increasing gold’s appeal as a safe haven, offsetting the effect of higher interest rates.”
In the short term, however, “only a miraculous drop in the dollar could create gold,” warns Oanda analyst Jeffrey Halley.
At around 15:15 GMT (17:15 Paris), an ounce of gold was trading at $1,745.98, up from $1,811.43 the previous Friday at the end of the session.
Sugar prices rose during the week as market supply remained low and part of the crop was converted to ethanol due to rising fuel prices.
Sugar supply and production are currently limited, said Price Futures Group analyst Jack Scoville.
Brazil, one of the world’s largest sugar producers and exporters, “is in the process of harvesting its sugar cane crop and turning most of it into ethanol,” he says.
High oil and fuel prices are enticing producers to convert part of their crops into ethanol, reducing the amount of sugar on the market and driving up prices.
While crude oil prices have recently been capped by fears of a global economic slowdown, fuel prices continue to rise.
But there is also selling, “driven by the notion that a global recession is imminent, which has been reinforced by the strengthening US dollar,” says Price Futures Group’s Jack Scoville.
In New York, a pound of raw sugar for delivery in October was worth 19.06 cents, up from 18.07 cents seven days earlier.
In London, a tonne of white sugar for delivery in October was worth $566.00 at the close, up from $549.40 on Friday last week.
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