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Metal commodities were still struggling on Thursday morning, with silver, copper and platinum all down, following a stronger US dollar as well as the release of the US Federal Open Market Committee (FOMC) minutes yesterday.
The US Federal Reserve (the Fed) has announced it is planning to shrink its balance sheet by approximately $95bn a month, starting from May this year. However, US treasury yields have slowed somewhat finally following steady gains in the past few trading sessions; together, these have gone helped cap metal losses.
Although cautious optimism is returning slowly in the wider market, leading to more interest in riskier assets, investors are still concerned about the effects of the ongoing war in Russia, which is contributing to precious metal prices trading in a mostly tight range.
In London morning trading, gold inched up 0.06% to $1,926.67 per troy ounce (t oz) as demand for gold bars and coins remained strong following concerns of economic slowdown amid higher energy prices and the ongoing war.
Silver dropped 0.20% to $24.38/t oz as investors worried about the likelihood of a hike of 50 basis points (bps) in interest rates this May by the Fed. The move would be in order to control inflation, which is currently at multi-year highs.
US 10-year treasury yields inched lower by 0.3bps to 2.598%, snapping a four-day winning streak as the yield curve stabilised somewhat.
Platinum dropped by 0.42% to $949.59/t oz, dipping to its lowest level in more than two months as a stronger US dollar pared back gains from the ongoing Russian conflict and directed interest towards riskier assets.
Palladium climbed up by 1.47% to $2,199.93/t oz, steadily recovering the losses seen earlier in March due to a drop in demand from top automotive producer China as the country faces economic slowdown.
Copper dipped by 0.69% to $4.70 per pound. However, the red metal has been mostly buoyant, continually hovering close to the record high of $5 seen earlier this month. Reports of dwindling supplies from Peru – one of the top copper suppliers – have surfaced, leading to investor anxiety about potential shortages in the near future.
Aluminium traded mostly flat at $3,471.0 per tonne as the metal recently saw its highest quarterly gain in almost 35 years following supply constraints as well as an increase in the cost of production.
Nickel dropped by 0.44% to $33,600 per tonne following fast-dropping demand from top consumer China as the country shuts down a number of manufacturing hubs to carry out increased Covid-19 testing.
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