Copper price hits two-month high after Fed rate cut
Copper rose to its highest level since mid-July a day after the Federal Reserve announced an aggressive interest cut of half a percentage point to stimulate the US economy and the labor market. Copper for…
From the Energy Metal News archive. This article dates from Sep 20, 2024 and is preserved as first published.
Copper rose to its highest level since mid-July a day after the Federal Reserve announced an aggressive interest cut of half a percentage point to stimulate the US economy and the labor market.
Copper for delivery in October rose 2% from Wednesday’s settlement, touching $3.38 per pound ($9,636 per tonne) early Thursday morning on the Comex in New York.
The half-point cut unveiled by Fed Chair Jerome Powell is “beneficial to expectations for a soft landing in the US,” Everbright Futures Co. said in a note, adding that fundamentals for copper were gradually improving.
The half-point cut unveiled by Fed Chair Jerome Powell is “beneficial to expectations for a soft landing in the US,” Everbright Futures Co.
While most metals have posted solid gains this year, their performance has fallen short of the bullish forecasts many expected — particularly for copper. Weak demand from China has been a major disappointment, and ongoing uncertainty surrounding the upcoming US presidential elections has further dampened sentiment.
“The increase in the medium-term outlook for rates should come as a positive, with metals highly sensitive to factory activity and overall economic growth,” ANZ Group Holdings said in a note.
Earlier this week, analysts at Bank of America (BofA) projected copper price will rise above $10,000 per tonne by 2025.
The copper price remains strong due to high demand, constrained supply and increased investment in energy transition projects, BofA stated.
“Manufacturing activity should stabilize as the Fed cuts rates, so we maintain our constructive copper view into 2025,” the bank’s analysts said.
