Gold Prices Rise Following Positive Economic Factors
Gold prices are beginning to look a lot like gold prices. The precious yellow metal is starting to make a comeback as prices for the bullion scaled $1,300 an ounce on Thursday following several positive economic factors.
News of India’s central banks easing some of its importing rule was a start. The bank lighten up on its mandatory 20 percent re-export on all gold cargoes, allowing trading houses and certain banks to boost imports.
“We do know that there is a wedding season in India and relaxing these import rules will break the premium price for the metal in the country, which could lift up the demand,” said Naeem Aslam, chief market analyst at AvaTrade.
Gold futures for June delivery exchanged hands for $1,295.00 an ounce on the Comex division of the New York Mercantile Exchange, up $7.10 from Thursday trading session.
India’s demand for gold has significantly dropped in recent months. Jewelry consumption declined 9 percent to 145.6 tons as did India’s buying of bars and coins, dropping 54 percent to 98 tons. India was replaced by China in 2013 as the biggest gold user after the government curbed shipment.
Other economic factors for gold included the U.S. jobless claim increasing more than forecasted. The increase boosted demand for the precious metal, gaining 7.7 percent on concerns the economic recovery was fragile.
“Today’s data shows that the job market is struggling and rate hikes may be far away,” Chris Gaffney, senior market strategist at EverBank Wealth Management, said in an interview. “‘There is some safe-haven buying.’’
According to Gaffney, imports by India will probably rise after the central banks reduction in re-export fees, allowing more firms to buy metal from overseas. India’s imports may expand by 10 metric tons to 15 tons a month with shipments doubling in the next few months.
“We are seeing some physical buying because of optimism about India,” Gaffney said.
Gold prices settled at $1,293 an ounce on Thursday.
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.