Background on Key Figures and Context
The recent drop in gold prices comes as U.S. President Donald Trump reassured investors that he has no plans to fire Jerome Powell, the chair of the Federal Reserve. Additionally, positive developments in U.S.-China trade talks have bolstered investor confidence, leading to a shift towards higher-risk assets.
Scott Besson, the U.S. Treasury Secretary, also indicated that excessively high tariffs between the U.S. and China need to come down before trade negotiations can proceed.
Gold’s Recent Performance and Market Sentiment
Gold, traditionally viewed as a safe-haven asset during political and financial uncertainty, has surged over 26% this year due to central bank purchases of physical gold, fears of a trade war, and strong investment demand.
However, the recent market sentiment improvement and dollar’s rebound have led investors to rotate away from safe-haven assets like gold. Phillip Streible, Chief Market Strategist at Blue Line Futures, noted that this shift has resulted in investors pursuing specific names such as Apple and Tesla.
Technical Analysis and Other Precious Metals
Ole Hansen of Saxo Bank warned that the sharp drop from near $3,500 and the subsequent risk of a deeper correction should be noted.
Among other precious metals, silver increased by 2.8% to $33.42 per ounce; platinum gained around 1.3% to $971.02 per ounce; and palladium added 0.7% to $942.76 per ounce.
Base Metals Performance
Copper prices reached a three-week high as global trade tensions eased following Trump’s suggestion that tariffs on imports from the world’s largest consumer, China, might decrease.
The benchmark copper price on the London Metal Exchange (LME) rose 0.1% to $9,379 per tonne, peaking at $9,481.5 per tonne – the highest since April 3rd.
Copper has gained over 15% since hitting a 17-month low of $8,105 earlier this month.
Key Questions and Answers
- Q: Who are the key figures mentioned in this article? The key figures are U.S. President Donald Trump, Federal Reserve Chair Jerome Powell, and U.S. Treasury Secretary Scott Besson.
- Q: Why did gold prices drop? Gold prices dropped due to an improved risk appetite among investors, as well as reassurance from President Trump that he would not fire Federal Reserve Chair Jerome Powell. Additionally, positive developments in U.S.-China trade talks further boosted investor confidence.
- Q: How have other precious metals performed? Silver increased by 2.8% to $33.42 per ounce; platinum gained around 1.3% to $971.02 per ounce; and palladium added 0.7% to $942.76 per ounce.
- Q: What is the current status of copper prices? Copper prices reached a three-week high as global trade tensions eased following Trump’s suggestion that tariffs on imports from China might decrease. The benchmark copper price on the London Metal Exchange (LME) rose 0.1% to $9,379 per tonne, having peaked at $9,481.5 per tonne – the highest since April 3rd.
