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Copper Spikes on Trump $1.5 Trillion Infrastructure Plan

February 13, 2018 at 17:44 by Andrew Moran

Copper futures have been surging this week in the wake of President Donald Trump’s $1.5 trillion infrastructure announcement. Copper spiked more than 2% on Tuesday as investors expect higher demand from the US government, as well as state and local governments, amid exorbitant infrastructure spending.

March copper futures rose $0.07, or 2.27%, to $3.1565 per pound at 16:27 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The industrial metal inched two cents higher to start the trading week, and copper is trying to pare its year-to-date losses.

On Monday, the White House released its 55-page, $1.5 trillion infrastructure plan. Under the proposal, the federal government will chip in $200 billion, but Washington will require state and local governments to participate in the project. Also, despite warning against such an idea, the president will establish a public-private program.

Soon after the 2016 election, copper soared, recording its best week in more than three decades. Since President Trump is going through with his campaign promise, traders say that the US will demand large quantities of copper to help repair bridges, fix roads, and construct highways.

The red metal posted more gains from a lower US dollar as the greenback shed 0.51%. A weaker dollar is good for commodities like copper because it makes it cheaper for foreign investors to purchase.

Meanwhile, investors may be covering their positions ahead of the Lunar New Year holiday. China, the world’s biggest consumer of copper, will shut down the Shanghai Futures Exchange (ShFE) for a week.

Other metals are trading relatively flat on Tuesday. April gold futures climbed $3.40, or 0.26%, to $1,329.80 per ounce. March silver futures were down $0.03, or 0.21%, to $16.53 an ounce. April platinum futures rose $4.20, or 0.43%, to $977.00 an ounce. April palladium futures jumped $4.15, or 0.43%, to $980.30 per ounce.

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