Copper and most other metals declined as the U.S. dollar strengthened, reflecting the growing uncertainty surrounding the U.S. presidential race between Kamala Harris and Donald Trump. With votes still being counted and polls remaining open in several key battleground states, the rise of the dollar made metals more expensive for international buyers, putting downward pressure on prices.
As of the latest reports, Trump had taken early leads in critical swing states such as Georgia and North Carolina, contributing to the dollar’s gains. This shift in currency dynamics impacted commodity markets, with metal prices retreating after recent gains driven by optimism over China’s economic stimulus measures.
In the previous three sessions, metals had risen following reports of stronger-than-expected factory and service sector activity in China, the world’s largest consumer of metals. These figures fueled hopes that recent Chinese stimulus efforts could be starting to take effect, with Beijing expected to announce further economic support measures later this week.
However, on Wednesday morning, copper was down 0.9%, trading at $9,650 per ton on the London Metal Exchange, as of 10:50 a.m. in Shanghai. Zinc and aluminum also saw losses, dropping 1% and 0.8%, respectively. Iron ore futures, which have recently shown signs of strength, fell 1.9% to $103.40 per ton in Singapore. In China’s Dalian exchange, iron ore futures dropped 1.6%, trading at 778.50 yuan per ton.
The election-induced volatility in the currency markets and the mixed economic data from China have contributed to the uncertainty surrounding the outlook for metals in the near term. With a closely contested presidential race and ongoing market reactions to China’s economic performance, metals traders are likely to remain cautious in the days ahead.
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