Gold rises to mid-June highs

The price of gold extended its year-end rally on Wednesday to hit its highest level since mid-June, helped by a weaker dollar and bond returns.

Spot gold rose 1% to $1,858.06 an ounce, after climbing 1.4% to its highest level since June 13. US gold futures gained 1% to $1,864.70.

“We were looking at the possibility that inflation has probably peaked and if we see the economic numbers confirm that…gold is likely to continue to rise and could go closer to $1,865,” said Bart Melek, head of Strategy Commodity Markets at TD Securities.

Weakening demand amid higher borrowing costs pushed a measure of the prices paid by factories for inputs to the lowest level in more than two and a half years, signaling that goods disinflation is underway.

Copper prices fell to two-month lows as the market focuses on slowing growth and demand.

Benchmark copper on the London Metal Exchange fell 1% to $8.239 a tonne, after hitting a low not seen since November 30 of $8.188 a tonne.

The increase in Covid cases in China, the main copper consumer, has reinforced concerns about demand, already pressured by weakening industrial activity.

“Globally, it’s not looking good for industrial metals,” said a broker, adding that optimism about China’s loosening of Covid restrictions continues to be tempered by the number of infections.