Report By Investing.com – Copper gained on labor issues at two major mines and gold slipped in Asia on Friday on a growing expectation the Fed will hike rates next month.
Gold for April delivery on the Comex division of the New York Mercantile Exchange fell 0.17% to $1,239.55 a troy ounce, while silver futures for March delivery dipped 0.12% to $18.053 a troy ounce.
Copper futures rose 0.33% to $2.270 a pound as all work has stopped at Freeport-McMoRan’s giant copper mine in Indonesia and its workers plan a demonstration against the government’s move last month that halted exports of copper concentrate to boost domestic industries. Traders are also watching to renewed talks between striking workers and management at Chile’s Escondida copper mine.The mine, which is owned by BHP Billiton (LON:LON:BLT), produced over 1 million tonnes of copper, about 5% of the world’s total in 2016.
Overnight, gold prices added to overnight gains on Thursday, hitting a one-week high despite a brighter outlook for interest rate hikes on a raft of mostly upbeat U.S. economic data.
The number of people who filed for unemployment assistance in the U.S. last week rose by a less-than-expected 5,000 to 239,000 last week, holding close to the lowest level since 1973. A separate report showed that the Philadelphia Fed index surged to a reading of 43.3 from 23.6 in January. That was the highest level since early 1984.
Data also showed that building permits jumped by 4.6% to 1.285 million units last month from 1.210 million in December.
However, U.S. housing starts fell by 2.6% to 1.246 million units last month from December’s total of 1.279 million units.
Hawkish comments by Fed Chair Janet Yellen combined with better-than-expected U.S. economic data this week boosted prospects of a March interest rate hike from the Fed.
Fed fund futures priced in around a 27% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool, up from less than 10% at the start of the week. Odds of a June increase was seen at around 74%.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.