Raw materials: gold, copper and shaped coffee

Raw materials: gold, copper and shaped coffee

Since its lowest since November 2020, hit in mid-July, a tonne of copper has rebounded over $950.

Copper prices continued to rebound this week, strongly supported by Chinese announcements of measures to support the real estate sector, in great difficulty.

According to Financial Times, Beijing could lend up to 148 billion dollars “to revive real estate projects that had stalled due to payment problems,” said Carsten Fritsch, an analyst at Commerzbank.

“The prices of base metals, particularly copper, have risen sharply in response,” continues the analyst, China being a major consumer of industrial metals.

Since its lowest since November 2020, hit in mid-July, a tonne of copper has rebounded over $950.

The real estate sector has a very significant weight in the Chinese economy, since it represents about a quarter of Chinese GDP.

Chinese Premier Li Keqiang had mentioned last week the creation of a public sector support fund for the very tested real estate sector.

Around 3:40 p.m. GMT (5:40 p.m. in Paris) on the LME, a tonne of copper for delivery in three months traded at 7,910.00 dollars on Friday against 7,452.50 dollars on Friday at the close, seven days earlier.

gold leaps

The price of gold rose over the week, benefiting from the weakness of the dollar after a meeting of the American Federal Reserve (Fed) and a disappointing economic indicator in the United States.

The price of an ounce on Friday reached a three-week high at 1,768 dollars before falling a little during the session.

“Gold benefits from a weaker dollar because the markets believe that the Fed has been rather dove”, as economists call the followers of a flexible monetary policy, explains to AFP Han Tan analyst at Exinity.

If the Fed raised rates by 75 basis points, observers felt that the president of the monetary institute could have been more determined to raise rates at all costs.

The contraction of GDP for the second consecutive quarter in the United States was enough to boost gold, a safe haven.

However, gold’s gains were limited on Friday by inflation in the United States, which accelerated further in June according to the PCE index, favored by the Fed.

“It strengthens the dollar in the final hours of the week and the month,” says Michael Hewson, analyst at CMC Markets.

An ounce of gold traded around 1,765.89 dollars around 3:40 p.m. GMT, against 1,727.64 dollars seven days earlier at the end of trading.

Coffee takes on color

Coffee recovered during the week, despite the erosion of demand which persists, analysts noting a drop in supply from large producers, combined with uncertainty which hangs over the Brazilian harvest.

“Overall demand for coffee is lower, but the cash market remains strong,” said Price Futures Group analyst Jack Scoville.

“There is less origin coffee,” he continues, adding that Brazil, Central America and Vietnam have seen their supply drop.

Carsten Fritsch of Commerzbank points to “considerable uncertainty regarding the coffee harvest in Brazil”.

“Brazilian coffee growers reported harvest volumes were lower than expected, even taking into account the effects of last year’s frost,” the analyst said.

Brazil is the world’s largest producer of Arabica and a major producer of Robusta.

On New York’s ICE Futures US, a pound of Arabica for July delivery was worth 216.10 cents, down from 206.70 cents seven days earlier.

On the Liffe in London, a tonne of robusta for delivery in September was worth 2,032 dollars on Friday at 3:40 p.m. GMT against 1,955 dollars a week ago at the close.

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