NEW YORK: Copper is on the cusp of its longest rally on record, but the metal, seen as a global economic bellwether, has recently stumbled, and traders are watching Washington and Beijing for clues to the next leg up.
Traders and leading investors say the market needs more good news before prices can rip higher. A lot will depend on when president Joe Biden’s virus relief bill will pass and how expansive it will be, how quickly vaccines can be rolled out and how much demand from China, the world’s largest buyer of commodities, is reduced by efforts to limit the pandemic’s spread during the Lunar New Year holiday period.
“People are generally optimistic for the long-term prospect globally, but it’s a question of when it’s going to really take hold, ” said Jon Lamb, portfolio manager at Orion Resource Partners which had US$6.3bil under management as of the end of September. “It’s clarity on what those initiatives – from the next round of Covid relief funding to post-Covid stimulus infrastructure projects where electric vehicles (EV) and renewable energy are going to be big focuses – will look like and the timing will be the catalyst.”
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