Copper and Gold Prices Are Rising Up, Up and Away as China, Rate Hike Fears Ease

3 min readSep 5, 2023

Key takeaways

Copper and gold prices were both up on Monday
Gold prices rose thanks to fears abating around an increase in interest rates
Copper’s fortunes are largely tied to China, which had some promising economic data through to boost copper prices

In this downright weird economic environment we’ve been experiencing after the pandemic, copper and gold prices have fluctuated all over the place as result. But both saw gains early this week as both interest rate fears in the U.S. and China’s economy recovery turned a corner. Here’s what you need to know.

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What’s happening with gold prices?

The view that the Federal Reserve will most likely hold interest rates where they are at the following September meeting has left gold prices rising last week and into Monday. Spot gold rose 0.2% to $1,944.80 an ounce, while gold futures climbed 0.2% to $1,970.95 an ounce.

Why? Because the dollar and bond yields did the inverse, allowing gold prices to appreciate. It’s not a complete home run for gold prices, given interest rates are still so high and push up the cost of holding gold bullion, but it’s a step in the right direction for the yellow metal.

In the last 12 months, the spot price of gold has rallied 13%, with a year-high of $65,859.20.

What about copper prices?

Copper prices also benefited from a softer dollar, but also from hopes that China’s economic recovery shows signs of life after an unexpected slump in recent months.

With Chinese banks slashing yuan deposit rates and the People’s Bank loosening mortgage requirements in a bid to help the struggling Chinese property sector, copper futures rose 0.3% on Monday and neared a one-month high at $3.8628 a pound.

China is the world’s biggest copper importer, so the metal’s price heavily relies on China’s economic outlook. Thankfully, further fears were allayed with news that embattled property developer Country Garden Holdings had reached a deal to postpone some of its debts.

Copper futures are currently up 1.56% since the start of 2023.

The bottom line

Precious metals are a decent option for anyone looking to diversify their asset make-up in their portfolio. Now might be a good time to invest if we’re at the beginning of a rally for gold and copper, but nothing is ever certain — especially in this macroeconomic landscape. Thankfully, you can use AI investing to help hedge your bets.

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