- Gold Price Bounce Back
- Weak Chinese Copper export
- Focus On FED Meeting
Gold (XAU/USD) was up in Monday trading session after coming under pressure, as focus shifted from safe-havens to riskier assets, last week. Copper (HG/USD), on the other hand, was flat, after an impressive run at the back o improving demand around the world.
Gold prices were up by more than 0.6%, touching highs of $1693 after plunging below the crucial $1700 support level. The yellow metal was the subject of increased sell-off last week as employment data in the U.S beat expectations indicating that the world’s biggest economy is on a recovery path.
The Bullion had initially powered to eight-year highs as traders rushed to safe-havens as the COVID-19 pandemic continued to take a toll on riskier assets. With equities in the U.S recouping a substantial amount of losses accrued at the peak of the crisis, Gold remains under pressure to hold on to gains accumulated since the start of the year.
However, the yellow metal is still up by more than 9% for the year and trading in an uptrend. Economic uncertainty in the wake of the COVID-19 fall out is one of the developments expected to support gold prices. Similarly, the demand for safe-haven should remain high amidst escalating tensions between the U.S and China over trade deal and Hong Kong.
Copper under Pressure
Copper price, on the other hand, remains at three months high despite retreating slightly amidst concerns I over weakening Chinese export. Prices fell by 1.2% to $5,624 a ton. Chinese exports have been on a tailspin as global lockdowns continued to devastate demand for industrial metals and their products. Weak exports underscore pressure on the Chinese Manufacturing industry, one of the major consumers for the read metal.
In the week ahead, the focus will be on the U.S Federal Reserve poised to hold a two-day policy meeting, ending Wednesday. The outcome of the policy meeting should weigh in on the dollar, which should influence the direction in which gold and copper trade.