By Ambar Warrick
Gold prices traded above weekly lows on Friday as investors digested more hawkish comments from the Federal Reserve, while copper eyed a large weekly gain on supply concerns stemming from a strike in Chile’s Escondida mine.
rallied nearly 4% on Thursday after unionized workers at Chile’s Escondida, the world’s largest copper mine, voted to go on strike over safety concerns. The gains put copper on course for a weekly gain of more than 4%.
The mine, which is majority owned by Australian miner BHP Group (NYSE:), is one of the largest sources of copper in the world. Workers at the mine said they would begin partial work stoppages next week, followed by a complete shutdown later in September.
A 44-day strike at the mine in 2017 had severely tightened global copper supply and sent prices skyrocketing.
Copper futures were flat on Friday. Prices of the red metal have fallen sharply this year on fears of slowing demand in China, the world’s largest copper importer.
Data earlier this week showed China’s slumped in August, although copper imports remained steady. But traders feared an eventual slowdown in demand, as economic growth cools.
Gold prices were steady on Friday, but erased their gains this week on hawkish comments from the Fed.
rose 0.1% to $1,710.25 an ounce by 19:22 ET (11:22 GMT), while inched up to $1,721.15 an ounce. Both instruments were set to lose about 0.1% for the week, their fourth consecutive weekly loss.
Bullion prices slipped on Thursday after Fed Chair Jerome Powell reiterated the central bank’s hawkish stance during an address at the Cato Institute’s annual monetary conference. Powell vowed that the Fed would keep tightening policy aggressively until inflation was within its 2% target.
His comments kept the pinned near 20-year highs, despite pressure from the after a bigger-than-expected rate hike by the .
Powell’s comments also saw traders increase their expectations that the Fed will hike rates by 75 basis points this month. Markets are now pricing in anof the hike.
Fears of a hawkish Fed saw gold prices fall close to 2022 lows this week, as a rising dollar and yields took the sheen off the yellow metal. This pressure is expected to continue as long as the Fed keeps hiking rates.