Background on Key Figures and Context
The recent fluctuations in gold and copper prices have caught the attention of investors worldwide. The decline comes as US and China prepare to engage in trade talks, potentially easing tensions that have been disrupting the global economy. Scott Bessner, the US Secretary of Treasury, and Jamieson Greer, the chief US trade negotiator, are set to meet with China’s economic czar, He Lifeng, in Switzerland. This meeting marks a crucial step towards resolving the ongoing trade war.
Gold and copper prices have been on an upward trend this year, with gold rising by 29.1% and copper experiencing growth as well. However, the recent optimism surrounding the US-China talks has led to a 1% drop in gold prices and a similar decline in copper.
Gold Price Decline
Spot gold fell by 1.3% to $3,385.48 per ounce, while US gold futures dropped nearly 1% to $3,392.8. Despite the initial decline, spot gold recovered slightly post the Federal Reserve’s policy decision announcement, rising by 0.10% to $3,376 per ounce.
Copper Price Drop
In London, copper prices fell by 1.2% to $9,420 per tonne following the announcement of the US-China talks. The copper reference three-month contract had reached $9,582 earlier in the Asian trading session, marking its highest level since April 3rd. The ongoing trade dispute and a separate US investigation into copper imports have tightened short-term copper availability on the Shanghai Futures Exchange (SHFE) and the London Metal Exchange (LME).
The premium of Comex copper futures over LME prices has been high for months, as Washington continues to investigate potential new tariffs on copper imports.
Impact on Other Base Metals
- Aluminum on the LME decreased by 1.8% to $2,382.5 per tonne.
- Zinc fell by 0.6% to $2,617.5 per tonne.
- Lead increased by 1.8% to $1,959 per tonne.
- Tin and nickel both experienced a 0.9% drop, falling to $31,565 and $15,560 per tonne, respectively.
Key Questions and Answers
- What are the US-China trade talks about? The upcoming discussions aim to address trade tensions between the two countries, which have been causing economic disruptions worldwide.
- Who is involved in the talks? Scott Bessner, US Secretary of Treasury, and Jamieson Greer, the chief US trade negotiator, will meet with China’s economic advisor, He Lifeng.
- Why are gold and copper prices falling? The optimism surrounding the potential resolution of trade tensions has led to a decline in gold and copper prices as investors anticipate less risk.
- How are other base metals affected? The ongoing trade dispute and investigations into copper imports have tightened short-term availability of various base metals, causing price fluctuations.
