%Gold isn’t the only metal that’s rallying right now. %Copper prices just hit their highest level in five months due to optimism that China’s economic stimulus measures will boost demand.
Copper’s price is up 25% so far this year, taking it to $4.99 U.S. per pound. The industrial metal is now at its highest level in five months and closing in on its record high of $5.20 U.S. a pound.
Copper is a key component in industrial materials ranging from batteries and electrical wire to plumbing pipes and air conditioners.
The current rally has been spurred by the Chinese government announcing a “special action plan” aimed at boosting domestic growth and spending, notably in the construction sector.
However, some analysts are urging caution with the copper rally, noting that the outlook for the global economy has dimmed, and citing uncertainty caused by U.S. trade policies.
Those analysts say that copper won’t be spared from U.S. President Donald Trump’s trade tariffs and that the metal could be targeted directly, citing American national defense concerns.
Currently, the U.S. produces only about 50% of the copper it uses, relying on imports for the rest and to meet national demand.
Any price premium on copper is likely to disappear should tariffs on the metal be imposed by the Trump administration.
While copper has so far been spared from Trump’s tariffs, with the administration instead focusing on steel and aluminum, that could soon change.
The Trump administration is set to impose a new round of tariffs on its global trading partners starting on April 2 of this year.
