Copper drops as dollar strengthens on Trump nearing victory

Copper fell 1.6% to $9 583 a ton on the London Metal Exchange as of 8:12 a.m. local time, while zinc dropped 1.3% and aluminum lost 1%.

Copper fell along with other metals, weighed down by a spike in the dollar as Donald Trump closed in on victory in the US election.

The key battleground states of North Carolina, Georgia and Pennsylvania have all been called for Trump. He’s also ahead in Arizona, Wisconsin and Michigan, all but ending Kamala Harris’s hopes of mounting a comeback.

The prospect of a second Trump presidency pushed a gauge of the dollar to the strongest level in a year, making metals more expensive for many buyers.

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“A Trump presidency first brings worries among investors around policy uncertainty,” which reduces risk appetite, said Li Xuezhi, head of Chaos Ternary Research Institute. For Chinese investors, the most concerning is the potential tariffs to hit Chinese products, which is bearish for commodities, Li said.

Metals’ losses followed gains in the previous three sessions, when better-than-expected service activity and factory gauges in China suggested recent stimulus measures may be having some impact on the top metals consuming economy. Beijing is widely expected to outline more steps to aid the economy this week.

Copper fell 1.6% to $9 583 a ton on the London Metal Exchange as of 8:12 a.m. local time, while zinc dropped 1.3% and aluminum lost 1%. Iron ore was down 1.1% to $104.20 a ton in Singapore, while futures in Dalian fell 1.2% to close at 781.50 yuan.

© 2024 Bloomberg

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