Gold, copper and cocoa on the rise

The price of copper jumped last week on the London Metal Exchange (LME), reflecting investor optimism about the health of the global economy, although some analysts urged caution. The ton of copper reached 8,555 dollars on November 11, a peak since the end of June. At the end of trading, a ton of copper for delivery in three months was trading at 8,530 dollars, against 8,099 dollars at the close seven days earlier.

As recession forecasts multiply around the world, it is a rare positive signal for the economy: copper, omnipresent in industry, from electronics to real estate via the automobile, sees its price evolves over growth forecasts, earning it the nickname “Dr. Copper”. “China is sending signals that suggest that anti-Covid restrictions will be eased,” said Ole Hansen, analyst at Saxo Bank.

The repeated confinements of the world’s largest importer of raw materials weighed on demand.
But “with the clouds of recession gathering over several regions of the world, it may be a little early to bet on a lasting recovery”, warns the specialist.

gold at the top

The price of gold also rose over the week, benefiting from the weakness of the dollar after data on inflation in the United States, which finally seems to be slowing down.

On November 11, the price of an ounce of gold peaked at $1,766.64, its highest since mid-August. At the close, it cost 1,764.08 dollars, against 1,681.87 dollars seven days earlier at the end of trade. At 7.7% over one year in October according to the consumer price index published on November 10, US inflation is at its lowest since January 2022, and lower than expected by the markets.

This causes investors to bet on a less tight monetary policy of the United States Federal Reserve (Fed), in turn causing a decline in the dollar. And when the dollar, the reference currency of the gold market, declines, the purchasing power of investors using other currencies increases.

Moreover, key interest rates lowered by the Fed mean that the yield becomes less attractive for US government securities, which are also safe havens and therefore compete directly with gold.

In this context, investors are watching for any clue on the monetary policy to be expected in the United States. “Gold’s next big move could be triggered by a US jobs report, because if the US labor market continues to hold up, the Fed may be tempted to hike rates faster,” Han said. Tan, analyst at Exinity.

Cocoa benefits from a strike

Cocoa prices continued to rise over the week. A dockers’ strike has been limiting activity at the port of San Pedro, the second largest in Côte d’Ivoire, for several days, reports the local press of the world’s leading producer.

In London, the price of cocoa reached 2,059 pounds sterling per tonne on November 10, a peak since February 2020, before falling due to the strength of the pound, while, on the New York market, the tonne reached 2,577 dollars on November 11, the highest since May 2022. “No truck can be unloaded and no cocoa shipments have been able to leave the port for the week,” Commerzbank analysts report.

On the other hand, “as soon as the export deadlines are settled at the end of the strike, cocoa prices will lose their gains as farmers expect the pace of the harvest to accelerate and be more abundant. than the previous year”, they warn.
In London, a ton of cocoa for delivery in March 2023 was worth 1,975 pounds sterling on November 11 at the close, against 1,996 pounds sterling seven days earlier.

In New York, a ton for delivery the same month was worth 2,521 dollars, against 2,430 dollars a week earlier.


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