Precious and strategic metals see divergent market trends

Gold prices hit a one-week low on Wednesday as rising oil prices fueled inflation concerns linked to Middle East tensions. While spot gold rose slightly to $4,136.22 per ounce, investors are closely monitoring the upcoming Federal Reserve meeting on October 27-28 and the Personal Consumption Expenditures (PCE) report for signals on interest rate movements. Analysts suggest gold may remain range-bound, with markets pricing in an 88% probability of a rate hike in December.

In contrast, copper is outperforming gold, with prices rising 15.8% since the start of the year and over 30% in the last 12 months. Copper reached historic highs last month due to traders moving supplies to US warehouses ahead of potential tariffs, alongside supply disruptions in Chile caused by strikes and adverse weather. Demand for copper is being driven by the expansion of data center infrastructure, semiconductor manufacturing, and energy storage systems, elevating its status from a critical to a strategic metal in the context of artificial intelligence and the energy transition.