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Copper, Gold, and Silver Are Weaker Early on August 3

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Aug. 3 2016, Published 8:30 a.m. ET

Copper fell in the early morning hours

After posting moderate gains on August 2, copper prices weakened in the early morning hours on August 3. At 7:10 AM EST on August 3, the COMEX copper futures contract for September delivery was trading at $2.2 per pound—a decline of ~0.63%. The dollar’s recovery on Wednesday is weighing on copper prices.

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Sentiment remains weaker in copper market

The sentiment remains weaker in the copper market amid weaker demand signs and the oversupply situation. Lower prices made producers decrease their cost of production. According to recent reports by the Chile Copper Commission, the cost of production in major Chilean mines fell by 13% in 1Q16—compared to the same period in 2015. Chile is one of the major copper producers—it accounts for more than 30% of the global copper production. The market is expecting a monetary stimulus from China, the largest copper consumer in the world, amid weaker economic data.

On August 2, major copper producers Freeport-McMoRan (FCX) and BHP Billiton (BHP) fell 0.64% and 0.07%, while Glencore (GLNCY) and Rio Tinto (RIO) gained 0.82% and 0.34%. The SPDR S&P Metals & Mining ETF (XME) fell 0.97% and the PowerShares DB Base Metals (DBB) gained 0.29%.

Gold and silver lost momentum

After gaining on August 2, gold prices are stable and stayed at higher prices, while silver cooled off. At 7:25 AM EST on August 3, the COMEX gold futures contract for December delivery was trading at $1,370.65 per ounce—a drop of ~0.11%. Silver was trading at $20.6 per ounce—a drop of ~0.5%. The market is looking forward to the US non-farm payroll data scheduled to release on Friday to estimate the US economy’s strength.

On August 2, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), and Silver Wheaton (SLW) gained 2.5%, 3.6%, and 2.4%, respectively. Royal Gold (RGLD) fell 0.34%. The SPDR Gold Trust ETF (GLD) gained 0.83%.

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