Gold Slips as Risk Appetite Improves, Copper Hits 5-Week High

  • Commodities News
Gold Slips as Risk Appetite Improves, Copper Hits 5-Week High

By Ambar Warrick Gold prices slipped on Thursday as fears of a U.S. recession were eased by soft inflation data, while copper prices stuck to five-week highs as the dollar retreated. 

As of 2113 ET (0113 GMT), spot gold fell 0.1% to $1,789.91, while gold futures were down 0.5% at $1,805.45. 

Gold prices had rallied to a one-month high on Wednesday after data showed that U.S. inflationary pressures eased in July, which dented the dollar. But they had shortly retreated from their peak, as the data triggered a widespread rally in risk-driven assets. 

Gold prices now appear to be caught between a weakening dollar and improved risk appetite. U.S. producer price inflation , due at 0830 ET on Thursday, may provide further cues to the yellow metal.

Producer price inflation is expected to mirror a fall in consumer prices. But any signs that this trend did not extend to factory prices could dent risk appetite.

Silver futures dropped 1%, while platinum futures were largely unchanged. The dollar index was flat on Thursday after plummeting 1.1% in the prior session. 

Weakness in the dollar, amid growing bets on a smaller interest rate hike by the Federal Reserve in September boosted industrial metal prices. 

Copper Futures rose 0.2% to $3.64 a pound, following a 1.7% rally in the prior session. Zinc and Nickel futures rallied 2.5% and 4.2%, respectively, on Wednesday. 

But the spike in industrial metal prices comes despite a decline in factory activity across the globe. Producer price inflation in China fell through July, while manufacturing activity contracted in the face of COVID-19 lockdowns.

Industrial activity in the U.S. and Eurozone is also declining in the wake of surging commodity prices and increased supply chain issues earlier this year. 


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