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Why Are Copper, Gold, and Silver Weaker Early on August 19?

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Copper weakens as the dollar gains strength

After gaining on August 18 amid the weaker dollar, copper pared the gains in the early morning hours on August 19. At 6:50 AM EST on August 19, the COMEX copper futures contract for September delivery was trading at $2.16 per pound—a drop of ~0.3%.

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Weak demand concerns and oversupply situation

Weak demand signals from China and the oversupply situation are weighing on the copper market. The recently released Fed statement weakened the US dollar and supported copper prices on August 18. Read Copper Pared Gains despite a Weaker Dollar on August 18 to learn more about it. In the early morning hours on August 19, the dollar started recovering and took the shine out of copper. In addition, the signals of a slowdown in China’s construction activity and an increase in production weighed on copper prices.

On August 18, major copper producers Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) gained 1.9%, 1.8%, 1.9%, and 1.3%, respectively. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) gained 1.2% and 0.3%.

Gold and silver are weaker in the early morning

Gold and silver remained weaker in the early morning hours on August 19. At 7:00 AM EST on August 19, the COMEX gold futures contract for December delivery was trading at $1,350.05 per ounce—a drop of ~0.52%. The silver contract for September delivery was trading at $19.44 per barrel—a drop of ~1.5%. Gold is still holding its position at two-week high levels. The impact of the Fed’s minutes is still weighing on the US dollar. Read Gold and Silver Stable amid a Weaker Dollar on August 18 to learn how the US dollar and initial jobless claims report impacted gold prices on August 18.

On August 18, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) gained 0.86%, 0.95%, 0.89%, and 1.5%, respectively. The SPDR Gold Trust ETF (GLD) gained 0.47%.

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