Investing.com - Copper and gold prices fell to the lowest levels in a year on Thursday amid a wider selloff in metals fueled by the stronger dollar and building trade tensions.
Copper futures for September delivery were down 2.93% to $2.679 a pound by 05:20 AM ET (09:20 AM GMT), the weakest since July 14, 2017.
Prices of the industrial metal have fallen 11% so far this month, bringing losses for the year to date to around 18%, amid fears that an escalating trade spat between Washington and Beijing could hit demand for metals, particularly if Chinese growth is affected.
China is the world’s biggest commodity consumer and accounts for roughly half the demand of many metals like copper.
Metals prices have also been hit by the stronger dollar, which makes commodities priced in the U.S. currency more expensive for overseas buyers.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.32% to 95.14 on Thursday, within close reach of the eleven-month highs reached in late June.
Demand for the dollar continued to be underpinned after Federal Reserve Chairman Jerome Powell gave an upbeat assessment of the U.S. economy during congressional testimony on Tuesday and Wednesday, and downplayed the impact of uncertainty over U.S. trade policy on the outlook for additional rate hikes.
The remarks underpinned expectations for two additional rate hikes by the central bank this year.
Gold prices fell to the lowest levels in a year, with gold futures losing 0.91% to trade at $1,216.80.
Expectations for higher rates tend to be bearish for gold, which struggles to compete with yield-bearing assets when rates rise.
Gold prices have also failed to garner any support despite growing trade threats, suggesting the yellow metal is losing its safe haven status.
Silver futures were also at one-year lows, shedding 1.79% to trade at $15.295, while platinum futures dropped 1.55% to $804.60.
Meanwhile, zinc futures were down 4.15% to trade at $2,512.50, nickel futures lost 2.36% to trade at $13,305.00 and aluminum futures were off 0.98% at $2,016.25.