Following trends from previous US elections, copper prices are anticipated to rise, regardless of the election outcome. Citi's latest report suggests a temporary increase in copper prices to $10,000 per ton is possible in the coming week. Historically, copper has seen price hikes during nine of the ten US elections between 1988 and 2020.
In 2016, when Donald Trump won, copper prices surged 10.8% within a month. During Joe Biden’s victory in 2020, prices increased by 8.6% in a month and 34% over a year, even amid pandemic recovery.
Citi predicts that under the current US and China policy conditions, copper prices will see a short-term rise. A Trump victory could boost market risk appetite, pushing prices up, while a Harris win could ease trade tariff concerns, supporting copper prices.
Currently, London copper prices hover around $9,740, leaving room for a potential increase of over $250.
However, potential risks lie ahead, particularly if Trump's re-election leads to renewed tariff policies that could negatively impact base metals in the long run. Despite a possible initial surge, previous experiences from 2018 and 2019 show that such tariffs may ultimately lead to deflation and hinder global economic growth, affecting metal demand negatively.
