Copper and gold steady as bond yields hit 19-year high ahead of US rate decision
Copper and gold prices held near recent peaks as US Treasury yields surged to 5.04%, the highest since 2007, with traders pricing a 92% chance the Fed will hike rates. The outcome matters for European manufacturers reliant on copper and for eurozone borrowing costs via global bond markets.
Bottom line — European industrial input costs and bond markets brace as traders bet 92% on a Fed rate hike.
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- Copper futures edged higher on the London Metal Exchange but remain well below last week's record, which was fuelled by US tariff-driven supply fears, per Bloomberg.
- Gold traded around €3,970 (US$4,290) an ounce, according to The Business Times, with a 92% chance of a Fed rate hike priced in.
- The 10-year US Treasury yield hit 5.04%, the highest since 2007, as reported by The Economic Times, driven by energy prices and capital investment.
- OCBC strategist Christopher Wong said gold could fall to €3,700 (US$4,000) if the Fed keeps the door open to further tightening.
- Copper's earlier rally was driven by bets on a US tariff-driven supply squeeze, Bloomberg notes.
- Higher borrowing costs are typically negative for gold, which does not pay interest, according to The Business Times.