Gold prices moved little in Asian trade on Wednesday after pulling back from recent record highs, although safe haven demand remained high in the face of uncertainty over U.S. trade tariffs and slowing growth.
Copper prices, on the other hand, rose sharply as a major power outage in Chile- the world’s top copper producer- threatened to disrupt supplies. This largely overshadowed threats from U.S. President Donald Trump, that he will impose tariffs on imports of the red metal.
Gold was hit with some profit taking after racing to record highs over the past month, as haven demand was boosted by Trump’s tariff threats and growing fears of a cooling U.S. economy.
A softer dollar also benefited metal prices, as weak U.S. economic data spurred bets on more interest rates by the Federal Reserve.
Spot gold steadied at $2,916.06 an ounce, while gold futures expiring in April rose 0.4% to $2,929.74 an ounce by 00:21 ET (05:21 GMT). Spot prices hit a record high of $2,956.37 an ounce earlier this month, with markets now watching $3,000 an ounce as the next major milestone.
Copper rises as Chile disruptions offset Trump tariff threat
Benchmark copper futures on the London Metal Exchange rose 0.8% to $9,486.05 a ton, while March copper futures rose 0.9% to $4.7408 a pound.
The red metal was boosted by expectations of supply disruptions after Chile was hit with a widespread power outage, which also impacted the country’s massive copper mines.
Santiago declared a state of emergency, with the blackout attributed to a transmission failure in Chile’s north.
But swathes of Chile’s mining-rich north remained without power, which saw major mines, including Escondida, halt operations. A prolonged outage could heavily impact global copper supplies.
This notion helped markets largely look past Trump’s tariff threat. The U.S. President said he was considering tariffs on copper imports, after he earlier this month imposed 25% duties on steel and aluminum imports.
Trump said the tariffs will be aimed at shoring up local copper production in the U.S., and will also curb China’s market dominance of the red metal.
Trump’s tariffs, if imposed, stand to potentially hurt demand for copper, given that the U.S. is a major consumer of copper.
Metals benefit from softer dollar amid US economic jitters
Broader metal prices rose on Wednesday, benefiting from a softer dollar as weak economic data weighed on the greenback. The dollar index slid to a near three-month low after softer-than-expected consumer confidence data for February, which ramped up concerns over cooling private consumption- which is a major driver of the economy.
Platinum futures fell 0.2% to $976.30 an ounce, cooling from some overnight gains, while silver futures surged 1% to $32.158 an ounce.
Focus is now on upcoming U.S. gross domestic product data for the fourth quarter, as well as PCE price index data, which is the Fed’s preferred inflation gauge. Both prints are due later in the week.
