Gold Dips in Asia, but Copper Increases on Mine Labor Issues

On Friday, copper gained on labor matters at two major mines and gold fell in Asia on a rising expectation that the Fed will hike rates the approaching month.



On Friday, copper gained on labor matters at two major mines and gold fell in Asia on a rising expectation that the Fed will hike rates the approaching month.

As the U.S. greenback slightly recovered from losses posted in the prior session, gold prices glided lower on Friday,  although continuing geopolitical worries were expected to continue to support safe-haven demand.

EUR/USD slightly changed at 1.0669, just off Thursday’s one-week high of 1.0682,  02:24AM ET.

Delivery of gold for April on the Comex division of the New York Mercantile Exchange dropped 0.17% to $1,239.55 a troy ounce, while delivery of  silver futures for March plunged 0.12% to $18.053 a troy ounce, 10:54PM ET.

Copper futures increased 0.33% to $2.270 a pound as all work has stopped at Freeport-McMoRan’s giant copper mine in Indonesia and its employees plan a demonstration against the government’s move the previous month that halted exports of copper focus to increase domestic industries.

Traders are also looking to renewed talks between striking employees and management at Chile’s Escondida copper mine.The mine, which is owned by BHP Billiton (LON:LON:BLT), manufactured over 1 million tonnes of copper, approximately  5% of the world’s total in 2016.

On Thursday, gold prices added to overnight gains, hitting a one week peak in spite of a brighter view for interest rate hikes on a raft of mostly upbeat U.S. economic data.

The number of crowds  who filed for redundancy assistance in the U.S. the previous week increase by a less than expected 5,000 to 239,000 last week, holding close to the deepest level since 1973. A separate report presented that the Philadelphia Fed index surged to a reading of 43.3 from 23.6 in January. Which has been the highest level since early 1984.

Statistics also indicated that building permits increased by 4.6% to 1.285 million units last month from 1.210 million in December.

However, U.S. housing starts declining by2.6% to 1.246 million units last month from December’s total of 1.279 million units.

Hawkish remarks by Fed Chair Janet Yellen combined with better than expected U.S. economic statistics  this week increased predictions of a March interest rate hike from the Fed.

Fed fund futures priced in about  27% probability of a rate hike in March,  up from less than 10% at the beginning  of the week.  The odds of a June surge were seen at around 74%, according to the reports.

The precious metal is sensitive to adjust in U.S. rates, which lift the chances cost of holding non-yielding assets like bullion, while increasing the greenback in which it is priced.

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