Metals pare losses as traders assess recession risks, dollar
BNN Bloomberg
Industrial metals recouped losses, while gold fluctuated after dollar’s rally cooled, with traders assessing risks of a global recession.
The greenback gave up some strength after earlier rising to a record, providing some relief for commodities that are priced in the U.S. currency. Still, investors’ appetite for the dollar as a haven asset in times of economic uncertainty means metals will likely remain under pressure going forward. Monetary tightening by global central banks to rein in rampant inflation risks a recession, clouding demand prospects for copper and other industrial metals.
“In general the outlook is pretty weak for metals,” said Ryan McKay, a commodity strategist at TD Securities. “Gold of course should falter under a hawkish Fed and higher rates for longer. Base metals seem to be losing some supply-side support and are looking quite vulnerable to deteriorating demand conditions,” he said.
Main metals traded on the London Metal Exchange were mixed, with copper gaining as much as 0.5 per cent after tumbling 1.9 per cent earlier and aluminum slipping 0.2 per cent after dropping 1.2 per cent earlier. Bullion steadied, after earlier touching the lowest in more than two years.
