LONDON: Copper rose 1.4 percent on Thursday as fading concerns over the prospect of a trade war between China and the United States sparked a bounce in cyclical assets, driving European stocks up more than 2 percent.
Equity markets rebounded from the previous session’s two-month low after the United States indicated it was willing to negotiate a resolution to the trade spat between the world’s two biggest economies.
Investors had sought nominally safer assets earlier this week after a U.S. proposal for tariffs on $50 billion in Chinese goods prompted Beijing to respond that it would target key American imports in retaliation.
“The positive (factor) today is that there are possible talks on (averting) a trade war, and a possible de-escalation,” ABN Amro analyst Casper Burgering said. “Copper is a very cyclical metal, and it tends to react very swiftly to macroeconomic events.”
Copper remains undervalued given its underlying fundamentals, he added. “From the data I’ve received there is still no real shortage in the copper market, but given the projections for this year and next, it appears to be heading for a deficit,” he said.
Source: Brecorder
