Gold prices dip to near 2-mth low after CPI data boosts dollar; Copper slides

Investing.com– Gold prices fell to a near two-month low on Thursday, hit chiefly by a stronger dollar after data showed U.S. inflation remained sticky, while anticipation of more cues from the Federal Reserve also weighed. 

Among industrial metals, copper prices sank to a three-month low amid persistent jitters over top importer China, as the country’s recent round of stimulus measures largely underwhelmed. The prospect of higher U.S. trade tariffs on China, under a second Donald Trump presidency, also weighed.

But a stronger dollar remained a key weight on metal markets, as the greenback rose to a one-year peak on uncertainty over the long term outlook for interest rates.

Spot gold fell 0.5% to $2,560.74 an ounce, while gold futures expiring in December slid 0.8% to $2,565.25 an ounce by 23:41 ET (04:41 GMT). Spot gold was nursing an over 8% slide from a record high hit in October.

Gold pressured by dollar spike on sticky CPI data 

Losses in the yellow metal came tracking a sharp rise in the dollar and Treasury yields this week. The dollar’s rally intensified after data on Wednesday showed U.S. consumer price index inflation remained sticky in October.

While the reading saw traders ramp up bets on a December rate cut by the Fed, the longer-term outlook for rates grew more uncertain. 

Markets were also positioning for a potential pick-up in inflation on the back of expansionary and protectionist policies under a Trump administration, which is expected to keep long-term rates relatively high.

Focus on Thursday was on an upcoming address by Fed Chair Jerome Powell. Powell had last week reiterated the bank’s data-driven approach to further easing, after cutting rates by 25 basis points. 

Other precious metals were also negative on Thursday. Platinum futures fell 0.4% to $938.15 an ounce, while silver futures fell 1.4% to $30.233 an ounce. 

Copper slides to three-month low on China woes 

Among industrial metals, copper prices extended recent declines, hitting a three-month low as negative sentiment over top importer China remained in play.

Benchmark copper futures on the London Metal Exchange fell 0.9% to $8,940.50 a ton, while December copper futures fell 0.8% to $4.3060 a pound, with both contracts reaching their weakest levels since August. 

China’s recent round of fiscal measures largely underwhelmed traders hoping for more targeted measures to support private spending and the property market. The prospect of higher trade tariffs under Trump also dented China’s outlook.

Beijing is expected to outline more stimulus measures during two key political meetings in December.

Focus this week is on Chinese industrial production and retail sales data, due on Friday, for more cues on the economy.