Press "Enter" to skip to content

Metal Prices in Rally Mode as Trade Fears Ease; Copper Soars to 12-Week High

Copper was in rally mode on Friday.Copper was in rally mode on Friday. – Metal prices were in rally mode Friday as copper hit 12-week highs, shrugging off a strong dollar on easing trade war fears, though analysts warned downside momentum could resume.

gained 3.87% to $2.85, rose 2.61% to 2,524.75 and rose 4.76% to 13,262.50.

The United States and China, earlier this week, announced tariffs at a lower rate than many had feared, helping lift sentiment on trade, easing fears escalating trade tensions would dent China’s appetite for metals.

Not everyone is convinced, however, that the U.S.-China trade spat will be resolved sooner rather than later. Goldman Sachs (NYSE:) said the trade dispute between the two nations is in its infancy, warning that Washington may take further action against Beijing in “the next couple of weeks.”

“Additional tariffs (from the United States) are the most likely outcome, as the policy issues underlying the dispute will be difficult to resolve, the bilateral trade deficit at the heart of the dispute is unlikely to narrow substantially regardless of policy actions, and the White House will have greater political flexibility to increase tariffs after the midterm election,” Goldman Sachs said in a note.

Some analysts, meanwhile, warned against reading too much into the surge in copper prices Friday, warning that the prevailing trend was more bearish than bullish.

“For now we can characterise it as a relatively small correction following a big downtrend.”

The rise in metals comes despite a resurgent dollar as traders reined in bets on emerging-market currencies, while a slump in the pound also bolstered the greenback.

The , which measures the greenback against a trade-weighted basket of six major currencies, rose 0.41% to 93.85.

Dollar-denominated assets such as commodities are sensitive to moves in the dollar. A fall in the dollar makes them cheaper for holders of foreign currency, raising demand.

In precious metals, gold prices fell on fears that the yellow metal would come under pressure ahead of a widely expected Federal Reserve interest rate hike due next week.

for December delivery on the Comex division of the New York Mercantile Exchange fell by $10.60, or 0.88%, to $1,200.70 troy ounce.

were flat at $14.31 a troy ounce, while rose 0.75% to $828.10.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.