Gold, Copper Head for Sharp Weekly Losses as Fed Rate Risk Rises By Investing.com

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© Reuters.

By Ambar Warrick

Investing.com– Gold and copper prices were little changed on Friday and poised for steep weekly losses as rising expectations for deeper interest rate hikes by the Federal Reserve boosted the dollar and weighed on the metals markets.

prices were unchanged around $1,664.31 an ounce, while falling 0.3% to $1,673.15 an ounce as of 8:21 p.m. ET (0021 GMT). Both instruments fell about 2% on Thursday and were expected to lose about 3% for the week, their worst performance in more than two months.

Analysts had warned of further gold losses after it fell below $1,700 – a key support level – earlier this week.

Expectations of at least one by the Fed have soared after showing few signs of cooling in August. Signs of strength in the also indicated that the Fed has ample room to continue raising rates at a rapid pace.

flirted with 15-year highs, while the hovered near a 20-year high on Friday. The two have been by far the most significant weights on bullion prices this year.

Gold fell from highs reached at the start of the Russian-Ukrainian conflict as a series of interest rate hikes by the Fed led investors to seek better yields on the dollar and sovereign debt.

With the Fed poised to continue to tighten policy, the pressure on gold is likely to continue for the rest of the year.

Among industrial metals, they traded flat on Friday and were heading for a weekly loss of more than 3%.

This week’s losses, triggered by more fears of weaker demand in China, more than offset any gains made on the prospect of tighter supply.

Copper posted strong gains last week as a strike at Escondida, the world’s largest copper mine, indicated tighter supplies for the rest of the year.

But fears of a global economic recession have severely shaken demand prospects for the red metal.

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