While gold rose and iron ore and oil fell last week (see separate stories), the surprise in commodity markets was a sharp fall in copper prices (with zinc not far behind) in the wake of Donald Trump’s latest escalation of his trade war with China.
In fact, Friday saw US and LME copper prices post their steepest weekly fall in a year in the wake of Trump’s latest trade war tweets.
Trump’s announcement sent shockwaves through global markets, pushing shares, bond yields, oil lower and gold higher.
Trump’s tweets saw the US dollar jump to two-year high ahead of US July jobs data, and helped push China’s yuan lower.
The Aussie dollar also suffered, hitting a low of 67.63 US cents before it saw a late rebound to end at 68.02. The low on Friday was the lowest the currency has been since early 2009.
Industrial metals fell sharply (where China is the world’s biggest buyer, as it is for oil, iron ore but not gold), with zinc tumbling to its lowest in 11 months.
Three months copper on the London Metal Exchange ended 2.9% lower on Friday at $US5,729.50 a tonne after earlier matching a January low of $US5,725 a tonne.
In New York it was a similar story with Comex September copper falling 9.4 cents, or 3.5% on Friday, to $US2.5715 a pound, ending 4.2% lower for the week. That’s the lowest Comex copper has been from the start of March this year.
Friday saw LME zinc fall 2.2% to $US2,351 a tonne, nickel eased 1% to $US14,450, lead shed 1.9% to $US1,952, tin lost 2% to $US16,975 and aluminium was 0.6% lower at $US1,770.
LME copper was around 4% lower this week, the biggest weekly fall since August of last year
LME copper down around 20% from highs in June last year.
The Fed’s rate cut midweek had no impact on metals and other commodities, it was Trump’s latest trade tweets that did all the damage.
