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Trade War Continues to Pressure Copper Prices

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Trade War Continues to Pressure Copper Prices

Copper prices slid in overseas trading this morning thanks to a stronger dollar, lean factory-gate inflation in China, and ongoing concerns about global growth, trade tensions and rising U.S. interest rates. That’s just a few of the factors weighing in on the price of the red metal.

London copper prices slid more than one percent on Tuesday as the market faced its biggest one-day loss in more than a week. Three-month copper on the London Metal Exchange was down 1.2 percent at $6,223 ton. After posting a positive number last week, gaining 1.53%, copper started this week on a down note. The red metal opened this morning at $2.77 a pound. Click on the chart below for up-to-the-minute pricing.

Digging Deeper

The dollar edged higher on firmer U.S. treasury yields while Chinese stocks fell after data showed factory-gate inflation in the world’s top copper consumer had cooled for a third straight month in September, pointing to more pressure on the world’s second-biggest economy as it remains locked in an intensifying trade war with the United States. “Nothing positive has come along. Trade tensions could (go) into next year, oil prices are up and (U.S.) interest rates are rising,” William Adams, head of research at Fastmarkets told Reuters.

“Copper has dropped today on worries over trade war between the United States and China,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong told Reuters. “There are concerns on slowing manufacturing growth in China.”

BHP, the world’s largest miner, has nearly doubled its stake in SolGold Plc, bolstering its position against top shareholder Newcrest Mining as it eyes SolGold’s promising Cascabel copper-gold project in Ecuador. Reuters takes an in-depth look at what the deal could mean to the price of copper.

A degree of calm returned to global stock markets after Italy’s government signed off on an expansionary 2019 budget late Monday.

A Look Ahead – All Eyes Are On the Fed

On Wednesday investors will get the chance to review the minutes of the Federal Reserve’s September meeting, when it raised rates for a third time this year.

The minutes come in the aftermath of President Donald Trump’s criticism of the central bank’s recent rate hikes as the President unleashed a Twitter storm at the bank saying they are too tight and have gone “crazy” and are “out of control.”

Investors will also get updates on U.S. retail sales, industrial production and the health of the housing market.

Meanwhile, China is to release what will be closely watched data on third quarter growth on Friday, amid concerns about the global economic outlook and the ongoing trade spat between Washington and Beijing.

Here is a look at a list of significant events likely to affect the markets this week thanks to Investing.com.

Monday, October 15

Monday was the deadline for European Union countries to submit their draft 2019 budgets to the European Commission and Italy’s proposed budget is likely to garner the most attention.

The U.S. released data on retail sales.

The Bank of Canada published its business outlook survey.

Tuesday, October 16

New Zealand is to release data on consumer price inflation.

The Reserve Bank of Australia is to publish the minutes of its latest monetary policy meeting.

China is to release inflation data.

The UK is to produce its latest employment report.

Wednesday, October 17

The UK is to report on inflation figures.

Canada is to release data on manufacturing sales.

The U.S. is to report on building permits and housing starts.

Later in the day, the Fed is to publish the minutes of its September meeting.

Thursday, October 18

Australia is to publish its latest jobs report.

Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo.

The UK is to release data on retail sales.

The EU is to hold a summit meeting where the UK may reach a deal with the bloc on Brexit.

Friday, October 19

China is to release data on third quarter growth as well as figures on fixed asset investment and industrial production.

The UK is to publish figures for public sector borrowing.

Canada is to produce data on retail sales and inflation.

The U.S. is to report on existing home sales.

Bank of England Governor Mark Carney is to speak at an event in New York.

Further Reading

After A Tough 12 Months, Copper and Nickel Should Be Next Year’s Metal Winners – Forbes

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Jim Williams

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