Investing.com-- Gold prices fell in Asian trade on Thursday, seeing little safe haven demand despite increasing risk-off sentiment as traders rode a sharp appreciation in the Japanese yen.
A rout in broader commodity markets also raged on, with copper prices extended a sinking to a near four-month low amid persistent concerns over top importer China. Weak readings on manufacturing activity from the U.S., Germany and Japan also soured copper’s outlook.
Spot gold slid 0.9% to $2,376.11 an ounce, while gold futures expiring in August tumbled 1.7% to $2,375.40 an ounce by 00:52 ET (04:52 GMT).
Gold prices retreat as safe haven plays, rate hike bets favor yen
The yellow metal saw little safe haven demand even as global markets experienced a sharp drop in risk appetite, with traders pivoting into the Japanese yen. The yen’s USDJPY pair, which gauges the number of yen needed to buy one dollar, sank to an over two-month low on Thursday.
The yen benefited from an unwinding in short positions over the past week, following suspected currency market intervention by Tokyo. But speculation over a potential interest rate hike by the Bank of Japan next week also benefited the yen, especially as recent data signaled some resilience in the Japanese economy.
Gold and metal markets took little advantage of a drop in the dollar, which retreated before a slew of key U.S. economic readings in the coming days. Gross domestic product data for the second quarter is due later on Thursday, while PCE price index data- the Federal Reserve’s preferred inflation gauge- is due on Friday.
Other precious metals also retreated. Platinum futures slid 1.1% to $949.60 an ounce, while silver futures tumbled 4.2% to $28.098 an ounce, unwinding a bulk of their recent rally.
Copper losses deepen amid demand jitters
Among industrial metals, copper prices fell further on Thursday, facing increased selling pressure amid concerns over a slowdown in global demand.
Benchmark copper futures on the London Metal Exchange slid 1.6% to $8,960.50 a tonne- breaking below $9,000 for the first time since early-April. One-month copper futures fell 0.6% to $4.0540 a pound.
Both contracts were nursing steep losses in recent sessions, amid growing concerns over demand in top importer China, following a string of underwhelming economic readings from the country.
Concerns over a demand slowdown were furthered by weak manufacturing activity data from the U.S., Japan and Germany, which showed industrial activity was on the backfoot.