Copper prices slump as Indonesia’s Grasberg mine resumes production
Copper prices slumped in Asia on Tuesday as a strike at a key Indonesian mine has ended,.
Reuters reported that Freeport McMoRan’s Indonesian unit has resumed production of copper concentrate at its giant Grasberg mine. Attention is now focused on a weeks-long strike in Chile at the Escondida copper mine run by Australia’s BHP Billiton (LON:BLT).
Copper for May delivery on the Comex division of the New York Mercantile Exchange dropped 1.02% to $2.628 a pound on the news.
Elsewhere, gold for April delivery on the Comex fell 0.46% to $1,228,35 a troy ounce.
Overnight, gold prices traded higher on Monday, supported by a slump in dollar, which is on track for a fourth session of losses, after G20 financial leaders failed to make a case for open and free global trade while more dovish than expected Fed comments last Wednesday concerning rate hikes continued to support the yellow-metal.
Chicago Fed President Charles Evans said the central bank will likely wait until June to decide on the next rate hike in comments made ahead ofa slate of Fed policymaker remarks due on Tuesday.
New York Fed President William Dudley speaks at 6:35 a.m. in London, while Boston Fed President Eric Rosengren speaks in Bali, Indonesia. Kansas City Fed President Esther George speaks on the economy at noon and Cleveland Fed President Loretta Mester speaks at 6 p.m. ET.
Monday was a quiet day for top-tier economic data releases, investors continued to focused on the Federal Reserve’s comments last Wednesday, as the U.S. central bank maintained its outlook of two more rate hikes this year against expectations from market participants of three more rate hikes.
Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Meanwhile a slump in the dollar also added a layer of support for dollar denominated gold, the greenback is on track for a fourth day of losses, after G20 financial leaders dropped a pledge to keep global trade free and open from a policy statement at the weekend.