Base metals and the Trump effect

We have been asked a lot in the past day or so about the impact on the base metals of Donald Trump’s surprise victory in the US presidential election. There is interest in the short term Trump-effect in light of the strength in base metal prices. And there is interest in the longer term effect of ‘Trumponomics’ on the market fundamentals.

Before the election, the base metals were already on a tear from LME Week in London last week, where quite a bullish consensus formed, especially for copper. So there was momentum from that, and from technical break-outs on the many of the charts.

When markets are in this sort of mood they find excuses to extend their rallies, and the excuse from the Trump victory was his promise to spend massively to overhaul the country’s transport, telecommunications, water supply and electricity infrastructure. In theory, that sounds like a boost for metal demand.

But if the base metals weren’t already in such an upbeat mood heading into the election, they may well have reacted very differently to the result. After all,...


November 11, 2016

00:00 GMT