nickel stagnates, coffee and gold retreat

London (awp/afp) – The price of gold continued to fall over the week, penalized by the rise in bond market rates and despite concerns about global growth.

“The performance of government bonds continues to put pressure” on the gold market, comments Fawad Razaqzada, analyst at City Index.

If gold is seen as a safe haven, the US Federal Reserve’s (Fed) rate hike policy is making government bonds more profitable: US 10-year government bonds hit a peak since Friday. at the end of 2007 at 4.34%.

For investors, holding gold rather than these government securities therefore represents a shortfall.

In the longer term, however, some analysts believe that the safe haven could rise.

“There is the risk of a policy error that would cripple the US economy while driving down the dollar and bond yields,” said Saxo Bank analyst Ole Hansen.

Others, on the other hand, are worried about the gloomy outlook for the Chinese economy.

“China is suffering from its zero Covid policy” and as “India and China are the biggest buyers of gold, if one is not doing well, it is not good for physical demand”, warns Fawad Razaqzada.

Around 2:30 p.m. GMT (4:30 p.m. in Paris), an ounce of gold traded for 1,639.20 dollars, against 1,644.47 dollars seven days earlier.

The nickel is holding

The price of nickel was stable on the London Metal Exchange (LME), as the market is currently largely supplied, but global demand is expected to increase with sales of electric vehicles.

If the world nickel market was in deficit by 163,000 tonnes in 2021, according to the International Nickel Study Group, it should be in surplus by 144,000 for 2022. An estimate revised upwards, according to Commerzbank analysts, who thus note a market ” oversupplied”.

Demand for nickel for battery production, however, is expected to grow significantly over the long term, they estimate. “Overall, global demand is expected to grow by 4% this year and 11% next year,” Commerzbank said.

Many metals such as nickel, lithium or cobalt are essential for the manufacture of electric car batteries, allowing their size to be limited.

On the LME, a ton of nickel for delivery in three months traded at 21,795 dollars on Friday around 2:30 p.m. GMT, against 21,777 dollars the previous Friday at the close.

coffee broods

Coffee continued to decline over the week, touching a new low for more than a year in New York on Friday, the gloomy economic outlook suggesting sluggish demand.

On Friday, the arabica pound hit its lowest since September 2021 on New York’s ICE Futures US, at 187.30 cents.

“There is historically a fairly close relationship between changes in economic growth and coffee consumption,” says Bradley Saunders of Capital Economics.

Forecasts of economic recession therefore constitute “a significant threat” to global consumption.

Capital Economics predicts recessions in the United States, the United Kingdom and the euro zone next year, countries which represent around “40% of world coffee consumption”.

The cost of living also remains very high in these countries, with inflation reaching 8.2% over one year in September in the United States, 10.1% in the United Kingdom and 9.9% in the euro zone according to Euronext .

“Coffee is generally considered a luxury agricultural product and its demand is therefore cyclical,” continues Saunders.

Since coffee is traded in dollars, the rise in the greenback also weighs on the purchasing power of buyers using other currencies, and can thus limit demand.

On New York’s ICE Futures US, a pound of Arabica for December delivery was worth 190.35 cents, down from 196.70 cents seven days earlier.

On the Liffe in London, a tonne of robusta for delivery in January 2023 was worth 1,998 dollars on Friday against 2,051 dollars a week ago at the close.

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