On Friday, copper prices saw an uptick as weaker-than-expected US jobs data for October increased the likelihood of an upcoming Federal Reserve interest rate cut. This anticipated move is expected to weaken the dollar, potentially boosting the affordability of dollar-priced metals like copper for holders of other currencies.
In specific trading numbers, three-month copper on the London Metal Exchange (LME) rose by 0.5 percent, reaching $9,554.5 per metric ton. The rise in copper and other industrial metals was primarily driven by the dollar’s softened performance. The dollar, which had shown gains earlier in the day, declined after October’s US nonfarm payrolls data fell below market expectations, partially due to disruptions from hurricanes and aerospace factory strikes.
As a result, market traders have raised the probability of a quarter-point rate cut at the Federal Reserve’s meeting scheduled for 7 November, with current forecasts nearly certain at 99 percent, up from a prior 92 percent. Lower interest rates could discourage foreign investments, which would exert additional downward pressure on the dollar’s value.
Despite the movement in copper prices, overall trading volumes in industrial metals remained subdued as market participants largely held back amid the approaching 5 November US presidential election. CRU analyst Craig Lang commented that this “wait-and-see” stance is due to the election’s potential impact on tariff policies between the US and China, the world’s largest consumer of metals. Polling indicates a tight race between incumbent Donald Trump and challenger Kamala Harris, adding to market caution.
The dollar’s performance against the offshore yuan also highlighted this uncertainty, reaching levels not seen since August 2015. The US election outcome could also influence the scale of China’s economic stimulus measures aimed at stabilising its economy, which in turn may impact global metals demand.
Jubilee Metals Group plc (LON:JLP) is a diversified metal recovery business with a world-class portfolio of projects in South Africa and Zambia. The Company’s expanding multi-project portfolio across South Africa and Zambia provides exposure to a broad commodity basket including Platinum Group Metals, chrome, lead, zinc, vanadium, copper and cobalt.
