Copper prices rose to their highest level since December’s rally paused yesterday, recording a 2% gain by close on the London Metals Exchange. Oil prices meanwhile slipped this morning with Brent crude down 0.2% to $55.33 per barrel and WTI also shedding 0.3% to $53.01 a barrel. Gold added another 0.5% loss this morning to Tuesday’s 0.8% slide, suffering as equity markets re-found their mojo.
Executive orders signed by President Trump yesterday, seen as the first steps towards significant infrastructure spending by facilitating the construction of the Keystone XL pipeline and the completion of the final section of the Dakota Access pipeline, helped send the S&P and Nasdaq indices to new record highs yesterday.
Copper prices have dropped back slightly this morning, down 0.2% to $5,933 a tonne. Yesterday’s gains were driven by a combination of market confidence in significant infrastructure projects on the horizon, particularly in the U.S. under Trump as well as the prospect of a possible strike at the world’s largest copper mine. Worker’s at BHP Billiton’s Escondida in Chile have rejected the company’s latest offer and will vote on strike action in what seems set to become an extended dispute. In a Monday report the Chilean Copper Commission raised its price estimates for 2017 and 2018. U.S. demand is expected to grow by 2.5% this year, pushing the market into a supply deficit.
After touching 2-month highs on uncertainties surrounding Trump policies and fears over a protectionist stance on international trade, gold prices dropped yesterday as infrastructure spending hopes sent equities back to optimism. Analysts are also predicting that further falls could be seen this week on a technical correction after strong gains for gold prices this year, which has seen a 5%+ rise. Demand from China is also dropping as the Lunar New Year approaches.