LONDON (Reuters) – Copper reached its highest price since March on Monday after the FBI cleared U.S. presidential candidate Hillary Clinton of wrongdoing after further investigation of her email practices, boosting global markets before Tuesday’s election.
Clinton is viewed by markets as a status quo candidate with more predictable policies than her Republican rival Donald Trump, meaning that news favouring Clinton’s presidential bid generally boosts global risk appetite.
Benchmark copper on the London Metal Exchange rose 1 percent to $5,042 a tonne, having touched $5,095, the highest since March 18.
ETF Securities commodity strategist Nitesh Shah said the news from the FBI .
“That has provided the market with a bit of relief,” ETF Securities commodity strategist Nitesh Shah said of the latest election developments, though he cautioned that prices could remain volatile as more opinion polls come through before election results are in.
Markets are attempting to strike a balance between a Clinton win and the possibility of a sell-off in commodities if Trump is elected.
Reflecting on last week’s annual London Metals Exchange gathering, Macquarie said in a note that the 2016 meeting had seen the first year-on-year improvement in market sentiment since 2010.
“Even copper, this year’s laggard, has begun to show some price risk to the upside, with fundamentals improving and physical market terms turning more bullish lately,” the Australian bank said.
Supporting copper are moves in China to lift power investments by 83 percent over the 2016-2020 Five-Year Plan, according to Argonaut analyst Helen Lau.
Sourced by Zandi Shabalala – Reuters