Copper prices slide as rally following Donald Trump’s election begins to reverse
Copper prices slid today after a rally prompted by the surprise election of Donald Trump as US president came to a halt.
Three-month copper prices on the London Metal Exchanged dropped as far as 3.6 per cent during trading today and were down almost two per cent to $5,465 per tonne around mid-afternoon.
"Price action in copper has been something of a 'blow off top' with the momentum crowd piling in and then promptly scarpering as the rally loses steam," said Chris Beauchamp, chief market analyst at IG.
"But with a breakout of the size we've seen it looks like copper prices have finally turned a corner, particularly if US demand starts to ramp up."
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Trump's commitment to boost infrastructure spending last week drove the metal, which is used in wiring and construction, to its biggest weekly rally in three decades on Friday, when it jumped nearly eight per cent to its highest level since June last year.
Copper looked set to end the year flat just four weeks ago. Earlier this year, rising stockpiles of copper and other precious metals at exchanges added to worries that global demand would fail to return to the market after a crash in prices throughout most of 2015 and 2016.
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Iron ore and tin prices were also dragged down today, while the FTSE 350 mining index fell 4.4 per cent by mid-afternoon trading.
Copper groups' share prices were hit by the end of the rally. Kaz Minerals' stock was down more than eight per cent, while Vedanta Resources and Antofagasta shares fell more than five per cent today.