Gold Jumps Before Fed Minutes, Copper Remains Weak On China Woes
On Wednesday, the Gold prices remained supported as the investors await the minutes of the Fed's June meeting. Meanwhile, Copper prices have dropped on fears of a US-China trade war that would affect global demand.
During the last 3 sessions, the yellow metal remained strong and even staged a recovery after losing the $1900 support last week. The biggest reason behind the pressure on Gold prices is the fear of more rate hikes from the Fed.
At the time of writing this, the spot Gold price was $1926.38 per ounce, while the Gold futures were trading near $1933.85 per ounce.
Fed's Meeting Minutes Remains The Focus
It appears that the main focus is now on the meeting minutes of the Fed's last meetings as it would provide more cues on what's planned by the Fed.
At the last meeting, the central bank kept the rates unchanged but signaled 2 more rate hikes for the rest of 2023. According to Fed, inflation remains high, which warrants more action in the form of rate hikes.
Jerome Powell (Fed chairman) also confirmed 2 more rate hikes at various addresses and testimonies last week.
If we look at the Copper prices, they are under pressure after China's decision to block the export of germanium & gallium products. Both of these products are essential for the chipmaking process in the USA.
When checked last time, the Copper futures were trading near $3.7855/pound and is under pressure due to the US-China tension. This move by China comes after the US's decision to block the export of various chipmaking technologies.
This has raised fears of global supply chain disruptions now that China has also blocked he export of important rate earth minerals to the USA.
This move by China comes at a time when the country's economy is already struggling with a weak recovery. According to experts, any further move by the US or China will further effect the copper prices.