LONDON – Copper surged to a 15-month high on Wednesday, pulling most other metals up too on technical buying and as some investors speculated that a Donald Trump presidency could herald a period of significant fiscal stimulus and boost demand for metals.
In his victory speech, Trump said he would embark on a project to rebuild American infrastructure and would double U.S. economic growth. “The Republicans have control of both houses of Congress and that means there is a possibility that those kind of programs could become reality,” ICBC Standard Bank analyst Tom Kendall said.
Three-month copper on the London Metal Exchange rose as much as 3.4 percent to its highest since July 22, 2015 at $5,443 a tonne and traded 2.2 percent higher at $5,352 in official rings.
The metal was on track for its biggest daily increase since March. Estimates of speculative interest suggested that LME copper positioning had reached the biggest long position since February 2011, according to broker Marex Spectron.
“Over the last few days, there has been in the market a short-term CTA-type buying momentum and investors are now looking at the next level at around $5,445,” ICBC Standard’s Kendall said. “It’s pretty technical, and we had a big drop in canceled warrants this morning and also good inflation data out of China which are helping.”
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