Gold has gone through a difficult week, marked by a decline of around 3%, its sharpest weekly drop in six weeks. Despite a slight rebound at the end of the period around 4,000 USD per ounce, the yellow metal failed to regain momentum. U.S. inflation figures, weaker than expected, initially provided support by weighing on the dollar and bond yields. But this effect was quickly neutralized by the surge in oil prices, driven by rising tensions between the United States and Iran. The increase in crude oil revives inflation fears and reduces hopes for a rapid easing by the Federal Reserve. Several Fed officials have even mentioned the possibility of higher rates if inflation does not slow further. As for copper, the market remains divided: prices are stabilizing around 13,600 USD in London despite disappointing economic data from China, the world’s largest consumer of metals. Chinese GDP has slowed to its weakest pace in three and a half years, weighed down by fragile domestic demand. At the same time, supply risks are supporting prices, or at least limiting the downside, as illustrated by Rio Tinto’s announcement of a 7% drop in copper production in the second quarter.
Investment analysis of metals must take into account this combination of macroeconomic, geopolitical and industrial factors. Gold, traditionally a safe haven in times of uncertainty, paradoxically finds itself under pressure due to rising inflation expectations and the potential tightening of U.S. monetary policy. The rise in oil acts as an inflationary catalyst, reducing the appeal of gold in a context where real rates could rise. I am not a financial advisor, but it is clear that gold’s current dynamics reflect more an arbitrage between expected inflation and monetary policy than a questioning of its role as a safe asset. Copper, meanwhile, illustrates the tension between weakened Chinese demand and persistent supply risks. China, historically the engine of the market, is sending slowdown signals that weigh on consumption prospects. But production constraints, logistical disruptions and announcements from mining groups like Rio Tinto help maintain a floor under prices. The copper market thus remains in an unstable equilibrium, where each macroeconomic or industrial data point can quickly shift sentiment.
For investors, the conclusion is nuanced: metals are evolving in an environment where contradictory forces are multiplying. Gold suffers from an uncertain monetary context but retains its strategic role in the event of geopolitical or financial shocks. Copper, for its part, remains supported by long-term fundamentals linked to the energy transition, even if Chinese weakness requires increased vigilance. The current volatility reminds us that commodities are particularly sensitive to macroeconomic signals, geopolitical tensions and supply dynamics. For those following metal markets, this period demands a careful reading of indicators, as price movements can be rapid and amplified by external events.