Yellen helps gold and copper prices clock biggest loss in six months

Jessica Morris
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Gold bars are displayed at Shinhan Bank
The yellow metal has fallen around six per cent so far in May (Source: Getty)

Gold and copper prices melted in May — with the stronger dollar putting them on course for their biggest drop in six months.

Spot gold swelled 0.7 per cent to to $1,213 per ounce, but the yellow metal has still fallen around six per cent so far in May, also its biggest monthly decline in six.

Read more: Should you start hoarding gold?

Spot silver was headed for its biggest monthly drop since September 2014, down around 10 per cent, which is also its first such decline this year.

US Fed chair Janet Yellen recently said that interest rates would rise "fairly soon", echoing policymakers' previous comments which have strengthened the greenback. It can hurt demand for dollar-priced commodities by making them more expensive.

Three-month copper on the London Metal Exchange was up 0.7 per cent to $4,695 per tonne this afternoon. Despite the increase, it's still on course for a more than seven per cent decline this month, the biggest since November.

Julius Baer analyst Carsten Menke said the stronger dollar was feeding into persistent oversupply concerns.

Read more: Metals shine on brighter prospects for China

"The supply cuts people were expecting last year haven't happened. Producers chose to focus on cutting costs and maintaining production," he said.

But crude bucked the trend with oil prices set for their longest run of monthly gains in five years, helped by supply outages across the world. Brent crude, the global benchmark, has been hovering around $50 per barrel recently.

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