Base Metals & Iron Ore
Thursday's sharp pullback in the COMEX copper price from an all-time high underscores a key risk to the red metal's resilience. An eventual resolution of US copper tariff uncertainty would likely trigger a price relapse. That drawdown, however, would offer an attractive opportunity to increase structural exposure to the metal.
Copper prices are surging again after a brief pullback in the first quarter.
What is driving the renewed strength, and can it persist?
Higher oil prices threaten the global economy, warranting an underweight stance on equities. Over the long haul, industrial metals will fare better than crude.
The metals mania is fueling extreme volatility.
In particular, the price of copper has become detached from fundamentals and is vulnerable to the downside.
This report looks at the FX implications of the Trump tariffs, and the review of our Q1 trades.