Global mining stocks have taken a hit as metal prices dropped, driven by a strong US dollar and disappointing details from China’s latest stimulus measures. Major European mining stocks declined sharply this week, with shares of Rio Tinto, Anglo-American, and Glencore falling between 5% and 7%.
The surge in the US dollar exerted downward pressure on precious and industrial metal prices, including gold, silver, and copper. The Pan-European Stoxx 600 index fell by 2%, with the Basic Resources Index leading losses, down 3.72% on Tuesday.
China’s recent stimulus briefing further disappointed investors, lacking specific details that would bolster domestic demand and counter potential impacts of US tariffs. Copper and iron ore prices have slumped over the last three trading days, with the price of copper futures dropping by 3.5% and iron ore futures falling by 3.3%.
Experts expect Trump’s policies to increase US inflation, prompting the Federal Reserve to raise interest rates. This has fueled a rally in the dollar, making gold and silver less appealing to investors. The strong dollar and rising bond yields have also made copper and iron ore prices less attractive.
Kyle Rodda, senior market analyst at Compital.com, said: “The impact of tariffs on China is twofold. Firstly, it will slow China’s growth and thereby reduce demand for commodities.” He added that the Chinese Yuan will likely depreciate further to ‘offset’ the tariff impacts, which would in turn weaken China’s purchasing power.
Michael Brown, senior research strategist at Pepperstone in London, noted: “A break below $2,600/oz could now precipitate further selling pressure” on gold prices. The downside momentum in gold may continue as investors await more decisive policies from China to bolster domestic demand and counter potential impacts of US tariffs.
Source: https://www.euronews.com/business/2024/11/13/bitcoin-retreats-after-33-surge-since-trumps-us-election-win