Third consecutive day of falling for gold – At a 16-month low copper

Gold fell on Wednesday, for the third consecutive session, in the wake of Federal Reserve Chairman Jerome Powell’s statement to the Senate Finance Committee, which said that the forthcoming interest rate hikes by the US Federal Reserve will be “the appropriate ”.

The head of the Fed in his inaugural statement before the Commission, which will continue tomorrow, reiterated that the central bank is determined to act aggressively to tame the galloping inflation, but rejected the view that it plans to raise interest rates even more aggressively. .

“We expect that continued interest rate hikes will be appropriate, while the pace of these changes will continue to depend on the incoming data and the evolving outlook for the economy,” Powell said.

The head of the Fed continued to argue that the recession is not inevitable as a result of the policy of raising interest rates set by the central bank, although he added that “I do not see the possibility of a recession particularly high at the moment.”

Powell’s report on the dependence of Fed decisions on economic data and outlook, coupled with growing concerns from analysts and investors that an aggressive tightening threatens to push the economy into recession, has been cited by some commodity market participants as that the US Federal Reserve could take a “break” in interest rate hikes.

“The prospect of a recession in the second half of the year could lead to a halt in interest rate hikes,” Chintan Karnani, chief research officer at Insignia Consultants, told MarketWatch, adding that this would provide support for gold prices.

In fact, he is optimistic about the course of gold in the third quarter as long as he continues the daily close above $ 1,810, giving a target price of $ 1,950 and higher.

In the midst of this climate, the August contract for gold fell by 40 cents or 0.02% and closed at $ 1,838.40 an ounce.

Silver followed a similar course, with the July contract losing 35 cents or 1.6% and ending the day at $ 21,421 an ounce.

Concerns about an impending economic downturn also pushed copper prices – a metal often considered the indicator of economic health – to a 16-month low. The metal’s July contract fell 9 cents, or 2.4%, to close at $ 3,944 a pound, the lowest level since February 2021, according to FactSet.

Other metals also lost ground, with the July contract for platinum falling $ 12.60 or 1.3% to $ 926.90 an ounce and the September delivery for $ 24.80 or 1.3% ( also), at $ 1,837.90 an ounce.