Copper Prices Boosted by Weaker Dollar to Near Two-Month High

By David Hodari Features Dow Jones Newswires

The price of gold continued to push higher on Wednesday, with remarks from European Central Bank President Mario Draghi and Federal Reserve Chairwoman Janet Yellen helping the precious metal pare its losses from Monday's fat-finger plunge.

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Gold was up 0.41% at $1,252.15 a troy ounce in midmorning trade in London.

Copper, meanwhile, fell 0.2% to $5,835 a metric ton, with profit-taking pushing the base metals complex down from Tuesday's gains, according to Hunter Hillcoat, a mining analyst at Investec.

Gold's Wednesday resurgence followed a buy order for 815,000 ounces in early European trading on Tuesday which gave the metal's price a sharp boost. That purchase suggested that some of the gold unintentionally sold on Monday was bought back, Commerzbank said in a morning note.

Speeches from the chiefs of both the ECB and the Fed helped cement these gains, with Mr. Draghi announcing that the ECB would slowly withdraw from its expansionary monetary policy, and Ms. Yellen keeping quiet about any further Federal Open Market Committee interest rate increases.

Those speeches combined to see the WSJ Dollar Index, which measures the dollar against a basket of currencies, fall 0.13% to 88.23 and extend its slip to 0.76% on the week. U.S. Treasury yields had their largest one-day selloff since January on Tuesday.

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"To me this move [in gold] is about currency. The euro is up against the dollar and this has helped gold move higher," said Carsten Menke, a commodity research analyst at Julius Baer.

Gold's movement in the coming weeks will likely be dictated by the dollar's reaction to any further references to rate increases from Ms. Yellen and her FOMC colleagues, Investec's Mr. Hillcoat said.

"There are a number of dollar-related reasons as to gold's movements at the moment," the analyst said. Further comments would likely see either "gold being bought as an inflation hedge or sold as a proxy versus interest rate increases," he added.

Traders were looking to speeches from Mario Draghi, Bank of England Gov. Mark Carney, and Bank of Japan Governor Haruhiko Kuroda, all on Wednesday. U.S. jobs and gross domestic product data are due on Thursday, and Chinese nonmanufacturing purchasing managers index numbers are expected Friday.

Among base metals, aluminum was down 0.26% at $1,883.50 a metric ton, zinc fell 0.69% to $2,731 a metric ton, lead fell 0.20% to $2,280.50 a metric ton, tin fell 0.08% to $19,325 a metric ton and nickel was down 0.33% at $9,205 a metric ton.

Among precious metals, platinum was down 0.04% at $921.50 a troy ounce, palladium rose 0.24% to $862.58 a troy ounce and silver increased 0.60% to $16.80.

Write to David Hodari at David.Hodari@dowjones.com

Copper prices rose to a near two-month high Wednesday, lifted by a weaker dollar.

Copper for September delivery rose 0.4% to $2.6725 a pound on the Comex division of the New York Mercantile Exchange, the highest level since May 1.

The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.3% to 88.05. A weaker U.S. currency makes dollar-denominated commodities such as metals more affordable for buyers holding other currencies.

The falling dollar boosted gold and silver, as well. Gold for August delivery rose 0.2% to $1,249.80 a troy ounce, while September silver was up 1% to $16.83 a troy ounce.

Political uncertainty also helped lift gold. Senate Republican leaders abruptly postponed a vote Tuesday on a sweeping health-care bill until after Congress' July 4 recess. Many investors see the vote as a gauge of how difficult it will be for President Donald Trump to push through pledged fiscal stimulus and infrastructure spending.

The combination of a weaker U.S. currency and nervous stock investors may continue pushing gold higher in coming sessions, said Peter Hug, global trading director at Kitco Metals, in a note to clients.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

June 28, 2017 13:19 ET (17:19 GMT)