Both gold and copper prices, which have been sold down heavily in recent months, came under renewed pressure on Friday.
Gold for delivery in September fell $4.30 to $1,293.60 an ounce on the Comex division of the New York Mercantile Exchange on Friday, while copper for delivery in September closed $1.50, or 0.57%, lower to $2.6035 a pound after trading higher earlier in the day.
Metals prices have weakened due to rising trade tensions and threats of new tariffs that could hurt demand and economic growth.
The Trump administration is already preparing to introduce $200 billion in tariffs on Chinese products and President Trump on Friday revealed that a further $267 billion in tariffs were ready to go and could be rolled out on short notice.
Friday’s declines mean both gold and copper have fallen for 11 of the past 13 weeks. Gold is now down 12.4% from its January high, while copper has plunged almost 21% since June.
ANZ senior commodity strategist Daniel Hynes said that while the escalating trade conflict had invoked fears of weaker economic growth in China, which accounts for around half the world’s copper demand, Chinese import data and inventory levels suggested there had been little impact so far.
“After initially weakening as consumers pulled back from restocking amid the uncertainty, various premiums for metals have started to push higher, as China has earmarked a more proactive stance on fiscal policy,” Mr. Hynes said.
He also noted that environmental constraints and supply-side reforms had affected China’s domestic copper production levels, making it more reliant on imports.
“With domestic output impacted, imports into China look likely to remain strong. In fact, year-to-date copper imports are up 16%,” he said.
“Inventories are also lower. Over the three months since the trade war escalated, inventories of base metals held on exchanges are down between 10% and 30%.”
The latest job numbers from the Labor Department on Friday morning showed that the pace of hiring picked up in August, wages grew and the unemployment rate held steady. The latest show of strength in the labor market has boosted expectations that the Federal Reserve will keep raising interest rates, pushing the U.S. dollar higher.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was up 0.32% on Friday.
A rising dollar generally hurts dollar-denominated commodities like gold, as a stronger currency makes the metal less attractive and more expensive for international investors.
Analysts at Blue Line Futures said the fact gold was holding above the $1,200 mark was encouraging given the healthy jobs data.
“This is a great sign and signals that gold has already incurred the worst of the selling,” the analysts said.
In other metals, silver for September delivery fell 0.06% to $14.067 an ounce. Metal prices were mixed on the London Metal Exchange. Aluminum gained 1.13% to $2,063 a metric ton, but nickel fell 0.88% to $12,335 a metric ton and zinc dropped 1.54% to $2,403 a metric ton.