Investing.com–Gold prices fell in Asian trading on Thursday as safe-haven demand was weak despite rising risk sentiment, while traders saw a sharp appreciation in the Japanese yen.
Unrest also raged on in broader commodity markets, with copper prices falling further to their lowest point in almost four months amid continued concerns about top importer China. Weak manufacturing activity data in the US, Germany and Japan also hurt the outlook for copper.
fell 0.9% to $2,376.11 per ounce, while the August maturity at 00:52 ET (04:52 GMT) was down 1.7% to $2,375.40 per ounce.
Gold prices are retreating as safe havens play and interest rate hikes favor the yen
There was little safe-haven demand for the yellow metal even as global markets experienced a sharp drop in risk appetite, with traders targeting the Japanese yen. The yen pair, which measures the amount of yen needed to buy one dollar, fell to a more than two-month low on Thursday.
The yen benefited from a reduction in short positions last week, following a suspected intervention in the currency market by Tokyo. But speculation about a possible rate hike next week also favored the yen, especially as recent data indicated some resilience in the Japanese economy.
Gold and metals markets benefited little from a decline in the dollar, which retreated following a slew of key US economic data in the coming days. Second-quarter data will be released later on Thursday, while the numbers – the Federal Reserve’s favorite inflation gauge – will be released on Friday.
Other precious metals also retreated. fell 1.1% to $949.60 per ounce while down 4.2% to $28.098 per ounce, halting much of their recent rally.
Copper losses are increasing due to demand jitters
Among industrial metals, copper prices fell further on Thursday, reflecting increased selling pressure due to concerns about a slowdown in global demand.
The benchmark on the London Metal Exchange fell 1.6% to $8,960.50 per tonne, falling below $9,000 for the first time since early April. One month fell 0.6% to $4.0540 per pound.
Both contracts have seen steep losses in recent sessions, amid growing concerns about demand in top importer China, following a series of disappointing economic data from the country.
Concerns about a slowdown in demand were fueled by weak manufacturing activity data from the US, Japan and Germany, which showed industrial activity remained subdued.
