LONDON: Copper prices rallied on Tuesday as investors shrugged off new tit-for-tat tariffs by China and the United States to send stock markets higher and the dollar lower.
Fears that a US-China trade war would dampen demand for commodities have pushed industrial metals sharply lower in recent months, with copper down 17 percent from a June high.
But with investors already braced for tariffs, copper was supported by the unexpected resilience of global share prices and non-US currencies and expectations that stimulus in China, the largest metals consumer, will underpin demand. {FRX/]
"The negative effects of any tariffs and any falling demand in China (as a result) are being effectively countered by increased infrastructure spending," BMO Capital Markets analyst Kash Kamal said, adding that the tariff decision "was baked in."
LME COPPER: Benchmark copper on the London Metal Exchange closed up 2.4 percent at $6,087 a tonne after touching a 14-month low of $5,733 last month.
TECHNICALS: Copper broke above its recent downtrend line coming in at around $6,040.
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