Fizzling Chinese economy and global uncertainty sparks copper fall and gains in gold

PUBLISHED : Friday, 14 October, 2016, 1:22am
UPDATED : Friday, 14 October, 2016, 1:22am

Copper dropped and gold gained as weak Chinese trade data undermined confidence in the global economy.

Chinese exports unexpectedly shrank the most since February, while imports also declined. The figures signalled slower growth in the world’s second-largest economy just as the US prepares to raise interest rates, boosting gold’s appeal as a haven.

“The Chinese data was disappointing to the industrial metals and pushing the asset protection side of precious metals,” George Gero, a managing director at RBC Wealth Management, said in a telephone interview.

Copper is the worst performer among the six major base metals traded on the London Metal Exchange, trading little changed this year, as uncertainty in China, the world’s biggest metal consumer, damped prospects of more demand growth ahead. Chinese customs data released Thursday showed copper imports in September slid to the lowest since February 2015.

Copper futures fell 2.3 per cent to US$4,704 aper tonne ($2.13 a pound and headed for the biggest loss since June.

Meanwhile, gold has surged 19 per cent this year as slower global growth coupled with stimulus policies by central banks outside the US added to the metal’s appeal.

Gold futures for December delivery gained 0.5 per cent to $1,259.70 an ounce on the Comex in New York.

Platinum futures for January delivery slid 0.1 per cent to $941.10 an ounce on the New York Mercantile Exchange. On Wednesday, the metal traded in a bear market, down more than 20 per cent from the recent closing high in August.

The Bloomberg Americas Mining Index slumped for the second time in three days, with copper producers Freeport-McMoRan Inc., Teck Resources Ltd. and First Quantum Minerals Ltd. among the worst performers. US Steel Corp. paced declines by steelmakers as US benchmark hot-rolled coil touched the lowest in almost six months.

Silver futures for December delivery fell 0.1 per cent to $17.485 an ounce on the Comex. On the LME, aluminum, zinc, nickel, lead and tin also declined. On the Comex, copper futures for December delivery fell 2.4 per cent to $2.124.