LONDON: Copper prices rose on Wednesday as a 90-day pause agreed by Beijing and Washington on most of their tit-for-tat tariffs raised investors’ confidence that a global recession can be averted and demand will continue for growth-dependent metals.
Benchmark copper on the London Metal Exchange (LME) was up 0.2% at $9,621 a metric ton in official open-outcry trading after hitting $9,642, its highest since April 3.
“Investors have rotated away from safe-havens like gold back into the industrial space,” Panmure Liberum analyst Tom Price said. “However, they are not re-engaging the market in a vigorous way at this early stage but stay very cautious at the moment. They are wondering what (US President Donald) Trump is going to do next,” he added. Providing further support, the US dollar extended losses following its biggest decline in more than three weeks overnight after weaker than expected US consumer inflation data bolstered the case for Federal Reserve rate cuts.
The weaker US currency makes dollar-priced metals more affordable for other currency holders, while prospects of lower interest rates support the demand outlook for industrial metals.
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