Copper Muted on China COVID Woes, Gold Heads for Weekly Loss By

By Ambar Warrick

-- Copper prices were flat on fx008 ForexFriday as markets weighed signs of tightening supply against concerns over slowing demand after China, the world’s largest copper importer, dismissed speculation that it planned to scale back COVID restrictions.

Hawkish moves by the put metal markets on course to end the week lower, as the strengthened.

China’s health agency on Thursday reiterated its commitment to the zero-COVID policy, dismissing recent speculation that the country will lift the policy by March 2023. The comments also come amid rising infections in the country, which has invited renewed movement curbs in several major cities.

were flat at $3.4220 a pound by 20:17 ET (00:17 GMT) after tumbling 1.4% in the prior session. They were also set to lose 0.3% this week.

Prices of the red metal fell sharply this year on concerns that slowing economic activity in China will dent the country’s metal demand. Fears of a global recession also weighed on the metal, which tends to benefit from increased economic activity.

But prices of the red metal may benefit from tighter supply in the coming months. Major Peruvian copper mine Las Bambas started to curb operations this week due to recent blockades by indigenous communities.

This, coupled with a strike at the world’s largest copper mine, and sanctions against Russian producers, is expected to tighten copper supplies in the coming months.

Still, rising interest rates and strength in the U.S. dollar are widely expected to keep metal markets subdued in the coming months. Gold, which is more sensitive than most metals to interest rates, was set to lose about 1% this week after the Fed hiked rates and signaled more monetary tightening.

rose 0.1% on Friday to $1,631.88 an ounce, while rose 0.2% to $1,633.75 an ounce. Both instruments were recovering slightly from a series of sharp falls this week, after the Fed move.

Interest rate hikes by the Fed caused steep losses in gold this year, as the opportunity cost of holding the yellow metal increased.

Focus now turns to U.S. data due later in the day, which is expected to show resilience in the jobs market. This is likely to give the Fed enough economic headroom to keep raising interest rates, as the bank signaled this week.

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