Gold, copper set for best month of 2022 thanks to dovish Fed, China hopes By

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By Ambar Warrick– Gold and copper prices fell on Wednesday ahead of Federal Reserve Chairman Jerome Powell’s speech, but are on track for their best monthly gains this year following signs of bullishness US interest rates are likely to slow down in the coming months.

is expected to provide more signals on the US economy and the path of monetary policy for the rest of the year when he speaks at an event in Washington later in the day. The market is also waiting for the important US at the end of the week.

While the Fed’s November meeting showed a growing number of Fed members favoring smaller rate hikes in the coming months, Fed speakers warned that persistent inflation is likely to drive interest rates down. in the US will increase until 2024.

This didn’t help limit the month-long rally in the metals market, as the prospect of less rate hikes in December offers plenty of relief for non-yielding assets like gold.

prices were steady around $1,748.99 an ounce, while down 0.1% to $1,747.30 an ounce. Both instruments are up nearly 1% on Tuesday and are set to gain about 7% in November – their strongest monthly gains since May 2021.

However, the outlook for gold remains unclear as US inflation is trending much higher than the Fed’s annual target. Severe inflation could prompt the central bank to tighten monetary policy further to lower prices – a negative scenario for gold.

The yellow metal has fallen sharply this year as rising interest rates have pushed up the opportunity cost of holding non-yielding assets.

Among industrial metals, copper prices fell slightly on Wednesday, but are also set to be the best month of 2022.

fell 0.1% to $3,6405 a pound, after gaining 0.7% in the previous session. But they were set to rise by almost 8% in November – their best month since early 2021.

Copper prices were largely driven by speculation about scaling back COVID-related restrictions at major importer China.

The world’s largest copper importer is facing growing public outrage over its handling of the COVID-19 pandemic, which has fueled speculation that the government will be forced to suspend the measures. limit.

But Beijing has given no such indication so far, as the country grapples with a record increase in the number of daily COVID-19 infections. This saw the re-imposition of strict travel restrictions in several major cities over the past two months, putting heavy pressure on the Chinese economy.

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