[MARKET ANALYSIS]: Precious metals recover following Thursday's slump, whilst copper lags on the back of weaker risk sentiment

Precious metals are experiencing a rebound after yesterday's decline linked to a stronger dollar from robust US jobs data.

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  • Precious metals are rebounding after yesterday’s decline, which was driven by a stronger US dollar following strong jobs data surpassing market expectation. There is no fresh catalyst behind today’s recovery, though some analysts attribute the move to dip-buying after the recent sell-off.
  • Focus now turns to the US CPI release later today. A stronger-than-expected inflation print could reinforce hawkish expectations for the Federal Reserve, particularly considering the hotter labour data yesterday. This would likely strengthen the dollar and weigh on gold prices. Spot gold is currently trading near the upper end of USD 4,885.89–4,997.53/oz range, while silver is holding at the upper range of USD 73.745–79.085/oz. Elsewhere, ANZ revised its gold price forecast, and now sees gold hitting USD 5,800/oz in Q2 vs. previous forecast of USD 5,400/oz.
  • Copper trades slightly lower triggered by downbeat sentiment in Wall Street and APAC, although Europe fares somewhat better. The red metal trades at the lower end range of 12,800-13,021/t. Other relevant news in the metal space includes the Shanghai Weekly updating their Warehouse changes before the Chinese holiday: Copper +9.47%, Nickel +2.29%, Aluminium +21.3%.
Context

Today's recovery, largely attributed to dip-buying, could be short-lived as focus shifts to later US CPI data, which may reinforce hawkish Fed expectations and apply further pressure on gold prices. Conversely, copper remains pressured by weak risk sentiment, reflecting broader market anxieties, particularly on Wall Street and in the APAC region.

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