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Copper Posts More Gains amid Weaker US Dollar, French Election Fallout

April 26, 2017 at 16:55 by Andrew Moran

Copper futures are continuing their momentum thanks to a weaker US dollar and international markets celebrating the French election result. Copper prices are trading at their highest levels in two weeks amid broadened investor appeal and a healthy investment appetite for risk.

May copper futures rose $0.055, or 0.20%, to $2.5835 per pound at 16:39 GMT on Wednesday. Copper futures are trading at two-week highs and, despite a weak month, copper has been steadily rebounding. Year-to-date, the industrial metal has advanced close to 3%.

The red metal is benefiting from a lower greenback. The US dollar weakened against the euro soon after the French presidential election, and it is also being impacted by declining consumer confidence. A lower dollar is good for commodities like gold, silver, and copper because it makes it cheaper for foreign investors to purchase.

On Sunday, centrist candidate Emmanuel Macron was able to win the first round of voting. He now takes on Marine Le Pen in the second round on May 7. Early polls suggest that Macron will win in a landslide, which will please investors because he supports the European Union (EU) and fully represents the status quo.

Asian markets have been surging in the aftermath of the French election. This has prompted an immense appetite for risk.

US demand for copper remains indeterminate right now because US President Donald Trump has yet to unveil the specifics of his proposed $1 trillion infrastructure spending plan. Transportation Secretary Elaine Chao told the Boston Globe that the administration plans to debut the plan sometime in the summer.

Metal prices have experienced their worst month since May 2016. Over the last month, traders have been scaling back on their bullish bets, a negative for metals because they are mostly seen as safe-haven assets in a time of uncertainty.

Gold is trading relatively flat midweek. June gold futures tumbled $1.79, or 0.14%, to $1,265.40 per ounce. Silver is trading in the red as May silver futures fell $0.17, or 1.00%, to $17.41 an ounce.

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