Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Gold & Copper Performs Similarly, But Outlook is Vastly Different

November 11, 2011 at 3:42 by Vladimir Vyun

Both gold and copper was down yesterday and up today. But outlook for gold is bullish, while prospects for copper are not so good. The main reason for such different expectations is the situation in Europe that may increase demand for gold as a safe haven, but will certainly have negative impact on copper.

The European Commission released its growth forecast yesterday and it wasn’t optimistic. Gross domestic product of the European Union and the Eurozone is expected to grow only 0.5 percent. What made the Commission to look in the future with pessimism? The explanation was:

Three main risks are identified as weighing on the EU and the euro area economy: continued sovereign-debt-related uncertainty, the weakness of the financial industry and the sluggish world trade. There is a possibility of negative dynamics: slower growth could affect sovereign debtors and this, in turn, could deteriorate the condition of the financial sector, which would be unable to support growth.

Yesterday, Standard and Poor’s sent a message that France’s credit rating was downgraded, but later announced that was a mistake and the nation stays with its top AAA rating and stable outlook.

Gold traded at $1,768.20 per ounce today as of 3:31 GMT on COMEX after falling yesterday from $1,771.0 to $1,759.60. Copper spot price was $3.3695 per pound today, following the drop from $3.5640 to $3.3910 per pound on the previous trading session.

Leave a Reply