Gold, Copper Prices Fall on Trade Friction, Oil Selloff

By Ira Iosebashvili

Gold prices fell to their lowest level since late last year Friday and copper prices declined as investors reacted to U.S. tariffs on China and a selloff in oil.

Gold for August delivery was recently down 2.2% at $1,280.20 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest level since late December.

Copper for July delivery fell 2.6% to $3.1380 a pound.

The selling comes following news that President Donald Trump approved tariffs on about $50 billion of Chinese goods, as the U.S. ratchets up its trade fight with Beijing.

Investors are growing increasingly concerned that the intensifying trade conflict with China will hurt that nation's economy and slow global growth. China is the world's top consumer of many commodities, including copper.

"Tariffs on China could be a game changer for metals markets," said George Gero, managing director at RBC Capital Markets.

Gold is also being hurt by expectations of a more hawkish Federal Reserve, after the central bank raised its policy rate one-quarter percentage point and penciled in two more increases in 2018 earlier this week.

Expectations of higher rates tend to hurt gold, which struggles to compete with yield-bearing investments when yields rise.

A drop in oil prices also dragged down copper. Crude prices were recently down 2.6%, as investors looked ahead to next week's meeting between major producers in Vienna where a decision to raise production is expected.

Big moves in oil tend to sway copper and other raw materials, as some investors trade in a single basket, with the largest share dedicated to oil.

Write to Ira Iosebashvili at [email protected]