A good week for gold and sliver, thanks to president Donald Trump and his trade war, but not so good for copper and other metals which all sold off as the strength of future demand from China was questioned.
Gold futures surged Friday to their highest finish in five weeks, racking up a weekly gain of almost 3%, as the threat of a looming trade war between the US and China escalated and tensions in the Middle East rose with the appointment of noted hardliner, John Bolton as Trump’s National Security adviser.
“Gold’s gains feel unexpected, but considering the growing volatility in the equity markets and uncertainty surrounding the Chinese-U.S. tariffs, the implications from a larger trade war are sending safety into precious metals,” said Peter Spina, president and chief executive officer of GoldSeek.com, Marketwatch.com reported.
Comex April gold surged $US22.50, or 1.7%, to settle at $US1,349.90 an ounce, ending at its highest levels since February 16, according to FactSet data.
That was a weekly rise of 2.9%.
Gold had already risen earlier in the week on weakness in the US dollar following the Fed’s rate rise and suggestions of a less-aggressive policy this year.
Friday saw investors worry about the looming trade war as China fired back at the Trump administration’s move to add tariffs on at least $US50 billion worth of goods.
China’s commerce ministry on Friday said it would impose tariffs on $3 billion worth of imports from America, with officials accusing the US of violating global trade rules. These tariffs are in response to the earlier tariffs on steel and aluminium imports
Comex silver also moved higher, with the May contract up 1.2%, to $US16.582 an ounce, for a weekly rise of 1.9%.
Comex May copper fell 0.9% to $US2.993 a pound, settling down 3.7% on the week. It was the lowest close since last June.
In London, LME copper, aluminium and zinc hit their lowest levels since mid-December, while in Shanghai, copper fell to levels not seen since mid-2017.
London Metal Exchange copper ended down 0.5% at $US6,660 a tonne, having hit its lowest level since mid-December at $US6,623.50. Prices extended falls from the previous session, breaking the 200-day moving average for the first time in around 18 months, Reuters reported.
A sell-off in steel spilled into inputs nickel and zinc. Shanghai rebar steel fell nearly 7%, while LME nickel closed down 1.8% at $US12,950, having hit its lowest since early February. Zinc ended up 0.5% at $US3,217, having hit its lowest since mid-December.
LME aluminium ended down 1.2% at $US2,050.50, having hit three-month lows.
LME lead closed down 1.1% at $US2,341 while tin ended down 0.5% at $US20,750.
