According to Mining News Pro - On weekly reports we are trying to put an scoop on the metal market and find out what is happening in the global market.
Copper price rises despite China lockdowns, recession fears
Copper prices ended the week up on Friday, despite China’s extended covid restrictions and concerns growing about a potential recession. The price was also supported by slow growth in American jobs in August.
US employers added 315,000 new jobs in August, far fewer than 500,000 jobs in July. That number, however, is slightly higher than economists were expecting.
Copper for delivery in December rose 1.4% from Thursday’s settlement price, touching $3.45 per pound ($7,590 per tonne).
Some districts of China’s southern tech hub Shenzhen extended covid curbs on Friday, but stopped short of a full lockdown, while the megacity of Chengdu went into lockdown late on Thursday.
Naeem Aslam, a chief market analyst at Ava Trade, said the curbs in China would have an impact on both supply and demand.
“If smelters are shut down you will have less supply, but it also means less consumption, so it’s a double-edged sword,” he said.
Market participants are increasingly concerned that Europe’s energy crisis will impact demand, according to ANZ research.
Gold price rises as US jobs data eases pressure on Fed
Gold extended gains after a jobs report showed more Americans are coming back to the labor market, a welcome sign for the Federal Reserve as it tries to cool inflation.
Spot gold rose 1.0% to $1,713.20 per ounce by 11:40 a.m. ET, though it remains on track for a third straight weekly loss. US gold futures were up 0.9% to $1,725 per ounce in New York.
Meanwhile, the dollar retreated following the latest US jobs data, which fell mostly in line with expectations. US non-farm payrolls rose 315,000 last month, slightly higher than the median economist estimate.
The increase in non-farm payrolls was broadly in line with expectations “and therefore doesn’t add much pressure on the US Federal Reserve to raise rates faster than the market already expected,” Capital Economics commodities economist Edward Gardner said in a message to Bloomberg.
“The gold price rose slightly on the news as the data release reduces the risk of faster-than-expected rate hikes going forward, which would raise the opportunity cost of holding gold,” Gardner added.
“The jobs numbers were very close to market expectations. The market is deeming it as a goldilocks number as it doesn’t suggest weakness, but is not too strong to prompt an even more aggressive Fed,” said Jim Wyckoff, senior analyst at Kitco Metals, in a Reuters report. “Gold is kind of seeing a relief-short covering rally.”
“A slightly weaker US dollar and US short-term Treasury yields have given gold some relief recently. However, this has not changed the underlying downward trend in gold prices,” said Capital.com analyst Piero Cingari.
On the technical front, prices need to break above the trendline from the March peak, currently at $1,770, before signalling a recovery, Saxo Bank analyst Ole Hansen said in a note.
Attention will now turn to the central bank’s meeting later in September. Bullion has fallen for five consecutive months on expectations the Fed will keep interest rates high for some time, undermining non-yielding assets like gold.
Iron ore price down as China’s covid, property woes weigh
The iron ore price fell on Thursday pressured by worries over fresh covid-19 restrictions and property sector troubles in China squeezing demand for ferrous metals.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $95.89 a tonne Thursday morning, down 3.8%.
The most-traded iron ore contract, for January delivery on China’s Dalian Commodity Exchange ended daytime trade 1.2% lower at 675.50 yuan ($97.88) a tonne.
“Steel traders lack confidence in the market outlook,” Sinosteel Futures analysts said in a note.
One of China’s biggest cities, Chengdu, announced a lockdown of its 21.2 million residents as it launched four days of citywide covid-19 testing, as some of the country’s most populous and economically important urban centers battle outbreaks.
Nearly 70 Chinese cities, meanwhile, reported declines in new home prices last month, the most since the start of the pandemic, putting more pressure on local governments to quickly roll out additional support measures for homebuyers and developers.