Gold prices fall on inflation worries; copper slips lower

Investing.com -- Gold prices drifted lower Thursday, falling near to a two-month low, hit chiefly by a stronger dollar after the release of the latest US inflation data. 

At 10:45 ET (15:45 GMT), spot gold fell 0.2% to $2,567.53 an ounce, while gold futures expiring in December slid 0.6% to $2,572.40 an ounce. Spot gold was nursing an over 8% slide from a record high hit in October. Gold pressured by inflation 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.

This was backed up Thursday by data showing that US producer prices increased at a faster annual rate than anticipated in October, rising by 2.4% compared to a year ago, up from 1.9% in September and above economists' estimates of 2.3%.

While a rate cut by the Fed in December is widely expected, 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.

Other precious metals were also negative on Thursday. Platinum futures fell 0.1% to $942.20 an ounce, while silver futures fell 0.7% to $30.450 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 0.1% to $9,012.50 a ton, while December copper futures fell 0.1% to $4.0805 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.

(Ambar Warrick contributed to this article.)

 

 

Source: Investing.com