Key Economic Indicators and Market Reactions
On Wednesday, gold prices remained stable following a previous session’s drop, triggered by increased risk appetite after the truce between Israel and Iran. Market attention is now focused on upcoming U.S. economic data.
- Gold Performance: Spot gold rose 0.1% to $3,326.96 per ounce, recovering from Tuesday’s drop to a more than two-week low. U.S. gold futures also increased by 0.2% to $3,340.80 per ounce.
- Truce Between Israel and Iran: The ceasefire, mediated by U.S. President Donald Trump, appeared to hold on Wednesday, a day after both countries indicated their air war had ended.
Federal Reserve Chair Jerome Powell stated on Wednesday that while Trump’s trade plans might cause a temporary price jump, the risk of more persistent inflation is significant enough for the Fed to be cautious about further rate cuts. Gold, considered a safe haven during market turbulence, tends to perform well in low-interest-rate environments.
Copper Prices Gain on Israel-Iran Truce
Copper prices rose on Wednesday, supported by the truce between Israel and Iran that improved overall market sentiment.
- Copper Price Movement: Three-month copper on the London Metal Exchange (LME) increased by 0.5% to $9,717.50 per tonne.
- Market Analyst Insights: According to Sudakshina Unnikrishnan, an analyst at Standard Chartered, copper has remained steady throughout the quarter, caught between global growth concerns, tightened supply of copper concentrates, and declining LME warehouse inventories.
Data from the International Copper Study Group (ICSG) show that the global refined copper market had a deficit of 50,000 tonnes in April, compared to a surplus of 12,000 tonnes in March.
Key Questions and Answers
- Q: What caused the recent fluctuations in gold prices? A: The drop in gold prices was due to increased risk appetite following the truce between Israel and Iran.
- Q: How has the truce affected copper prices? A: The truce has boosted copper prices as it improved market sentiment.
- Q: What factors influence copper prices? A: Copper prices are affected by global growth concerns, supply constraints of copper concentrates, and changes in LME warehouse inventories.
- Q: How might Trump’s trade plans impact the market? A: While Trump’s trade plans could cause a temporary price jump, the risk of more persistent inflation may lead the Federal Reserve to be cautious about further rate cuts.
