Weekly Round-Up: Copper, Oil the Bright Spots in the Market

On Friday, the spot gold price slid 1.2 percent, to $1,179.41 per ounce, as world stocks climbed to record-setting highs, according to Reuters. Meanwhile, US gold futures for June delivery were at $1,178.60.

Ole Hansen, an analyst at Saxo Bank, noted, “[t]he stock market remains well behaved, and while that continues, the demand [for gold] is just not strong enough.”

The gold price was also battered this past week by positive US housing data and has now seen its third straight week of losses. Overall, its weak performance represents a widespread push away from metals as investors aim to benefit from an expected US Federal Reserve interest rate hike. Commodities don’t pay interest, and are less valuable than stocks when rates climb.

Moving forward, the precious metal’s prospects will be tightly linked to the US Federal Reserve policy meeting taking place next week.

For its part, silver followed gold down and dipped 1.1 percent to reach $15.69 an ounce.

The news was better for copper on the LME, which rose 1.8 percent to $6,044 a tonne, as per Reuters. Similarly, MarketWatch reported that copper on the COMEX gained 1.8 percent to hit $2.743 a pound. Low Chinese demand for the metal hurt the copper price early in the year, but unforeseen supply constraints have the potential to drive it up through the remainder of 2015.

“Mine output is going to disappoint significantly for 2015 (and) prices will go up over next 6-12 months,” said Nic Brown, head of commodities research for Natixis (EPA:KN), to Reuters.

Global oil supply still exceeds demand, but a weaker dollar, military conflict in Yemen and strong stock performances pushed the Brent crude price upward on Friday. Reuters said that Brent crude was trading at $65.80 a barrel, its highest level since December 2014.

Despite oil’s strong recent performance, the supply glut could drive its price down in the coming months.

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