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Copper Gains While Precious Metals Decline

May 6, 2020 at 18:07 by Vladimir Vyun

Gold logged substantial losses today, and other precious metals followed suit. While bullion did not drop as much as crude oil, it is interesting to note that the metal and crude were moving in the same direction. Usually, oil and gold trade inversely because crude oil is tied to economic growth, performing better when the news is good, while the yellow metal is considered to be a safe haven and tends to rise in times of uncertainty and fear. But that was not the case for gold lately as it seemingly loses its appeal of refuge to other assets, like the US dollar. Indeed, the greenback was very strong today despite disastrous employment data in the United States. On the other hand, gold failed to profit from the outlook for a global economic crisis. Often, low interest rates are beneficial to the metal. But even extremely loose monetary policies of central banks across the world seemingly failed to propel bullion higher. It was not necessarily that surprising considering that metals often fall in May, and traders have a saying “sell in May and go away”.

Interestingly, copper did not join the decline, managing to log reasonable gains during Wednesday’s trading session. It is hard to pinpoint the reason for the metal’s rally during the current risk-averse environment. One of the possible factors that could help copper is hope for an end of the lockdown and resumption of economic activity in countries across the world.

Futures for delivery of gold in June slid $22.6 (1.32%) to $1,668 per troy ounce as of 18:04 GMT on COMEX today. July contract for silver fell by $0.05 (0.36%) to $15.06 per ounce. Spot price for platinum tumbled by $13.59 (1.77%) to $755.77 per ounce, and palladium dropped $11.41 (0.63%) to $1,795.86 per ounce. At the same time, copper for delivery in July advanced by $0.018 (0.77%) to $2.3205 per pound.

If you have any questions and comments on commodities today, use the form below to reply.

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