By Ambar Warrick
Investing.com-- The prices of copper and most industrial metals tumbled on Tuesday amid growing concerns over a slowdown in major importer China, while gold prices slipped as safe haven buyers preferred the dollar.
Copper futures dropped 0.4% to $3.859 a pound by 21:28 ET (01:28 GMT), extending sharp losses from Monday on fears of a bigger slowdown in Chinese demand.
Global commodity markets plummeted after significantly weaker-than-expected industrial production data from China raised concerns over sluggish demand from the world’s largest commodity importer.
Chinese industrial output grew 3.8% in July, which was below expectations of 4.6%, and also lower than June’s reading of 3.9%. The data comes on the heels of several COVID-19 lockdowns across the country, which have severely crimped economic growth this year.
Chinese retail sales also read weaker than expected. Concerns over the economy were further exacerbated by an unexpected interest rate cut by the People’s Bank of China, pointing to extreme pressure on the central bank to support economic growth.
Aluminum prices slumped 1.2% on Monday, while nickel and zinc lost 4.6% and 0.4%, respectively.
But major miner BHP Group (NYSE:BHP) said it expects Chinese demand to remain resilient, despite current trends. The miner, which is the world's largest by market capitalization, intends to ramp up its iron ore and copper production on the expectation that metal demand will recover.
Gold prices edged lower on Tuesday, with the yellow metal also nursing steep losses as safe haven buyers pivoted into the dollar.
Spot gold was flat around $1,779.13 an ounce, while gold futures fell 0.2% to $1,794.1. Both instruments shed about 1% on Monday, while the dollar index surged 0.7%.
Returns on gold, which is considered a popular inflation hedge, have largely lagged inflation this year, amid volatility in metal markets.
In contrast, the prospect of rising U.S. interest rates has seen traders broadly stick to the dollar as a safe haven.