“The rise in US bond yields dealt a heavy blow to the precious metals markets,” explains Craig Erlam, analyst for Oanda.
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Gold has suffered this week after hitting a new all-time high last week.
“The rise in US bond yields dealt a heavy blow to the precious metals markets,” said Craig Erlam, analyst for Oanda, while their continued decline had recently contributed to the surge in gold.
On Tuesday, the yellow metal had its worst session since 2013, falling about 5.7%.
On the same day, silver lost almost 15%, its worst daily drop since October 2008.
If gold continues to benefit from favorable conditions, including ultra-accommodative monetary policies and risk aversion fueled by the coronavirus pandemic, the plunge could take time to be erased.
This “caused too much damage from a speculative point of view by scaring investors,” said Carsten Fritsch, analyst for Commerzbank.
It is precisely this category of buyers who had driven gold prices to new heights, in particular by compensating for the weakness of demand from jewelers.
At the end of last week, gold had reached 2,075.47 dollars an ounce, a level never seen before.
On the London Bullion Market, an ounce of gold was worth 1,946.30 dollars on Friday around 3.20 p.m. GMT (5.20 p.m. in Paris), against 2,035.55 dollars the previous Friday at the end of the session.
At the same time, an ounce of silver was worth $ 26.76, compared to $ 28.30 seven days ago.
The requested copper
The price of copper has appreciated slightly this week, supported by a falling dollar and Chinese economic data favorable to demand.
Copper is progressing “as the Chinese economic recovery continues in July,” said Anna Stablum, analyst at Marex Spectron.
The industrial production of the second world power has indeed recorded an increase of 4.8% in July over one year, the same score as in June, according to figures announced Friday by the National Bureau of Statistics (SNB).
The decline in the dollar this week, which lost some 0.37% against a basket of currencies, helped support the price of copper, with any decline in the dollar making the red metal denominated in greenback more attractive to investors with a ‘other currencies.
Market observers are now eyeing the resumption of trade talks between the United States and China on Saturday over the deal signed with great fanfare in January, which was to mark a truce in their trade war.
They are also awaiting “the results of the (mining) groups BHP and Antofagasta” next week, continued Ms. Stablum.
On the London Metal Exchange (LME), a tonne of copper for delivery in three months traded at $ 6,364.00 Friday around 3:20 p.m. GMT (5:20 p.m. in Paris), against $ 6,308.00 the previous Friday. at the close.
The coffee goes up
Coffee prices trended well during the week, supported by threats to supply despite still fragile demand.
“Stocks (of coffee) are decreasing (…) because of the weakness of exports from Central America,” said Societe Generale analysts in a note.
Latin America and the Caribbean is the region with the highest number of deaths from COVID-19: around 230,000, according to a report established Thursday by AFP from official sources.
Another threat to supply, a region of high production in Brazil, the world’s largest coffee producer, “experienced below-normal rainfall,” noted analysts from the French bank.
But “the demand for cafes and other catering establishments is still very weak,” worried Jack Scoville of Price Group, enough to moderate the rise in prices.
On the London Liffe, a ton of ROBUSTA for delivery in November was worth $ 1,387 on Friday at 3:25 p.m. GMT (5:25 p.m. in Paris), against $ 1,363 the previous Friday at the close. On the New York ICE Futures US, ARABICA’s pound for delivery in December was worth 118.00 cents, compared to 117.90 cents seven days earlier.
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