Copper futures are sliding on Wednesday to their lowest levels since January. The industrial metal is being impacted by growing geopolitical tensions and concerns that US President Donald Trump may not employ his “America First” message of infrastructure spending.
May copper futures tumbled $0.067, or 2.57%, to $2.541 per pound at 16:45 GMT on Wednesday. Copper prices slipped to
Foreign tensions are raising worldwide. Traders have been spooked by last week’s US military strike on Syria, the North Korean government, and the relationship between the US and China. Moreover, relations between the US and Russia have reportedly been strained because of the missile strike on a Syrian air base. These are all factors that have been adding to investors’ geopolitical fears.
The lack of policy details from the Trump administration pertaining to infrastructure is also putting pressure on copper prices. Despite reiterating a proposal to spend more than $1 trillion on infrastructure earlier this month, the president has been short on the details, and this is leading investors to believe that the US will be unable to lift demand.
Over the last six months, the US, Canada, China, and the UK have all pledged to implement significant infrastructure spending initiatives. Copper is a widely used metal in the construction industry.
The US dollar, which has been badly beaten in the first four months of 2017, is down 0.03%. A falling greenback is good for commodities like gold, silver, and copper because it makes it cheaper for foreign investors to purchase.
Global copper supplies appear to be returning to normal as mining operations in Chile and Peru have restarted. Copper prices had been benefiting in the first quarter of 2017 because mining supplies were disrupted due to worker disputes at some of the world’s largest mines.
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