Copper Slides as Trade Hopes Recede

Copper prices slid again Tuesday after President Trump increased pressure on China in a series of tweets, a potential setback for investors hoping that the world’s two largest economies can quickly reach a trade agreement.

The most-active copper futures, for September delivery, fell 1.4% to $2.6785 a pound on the Comex division of the New York Mercantile Exchange, their largest one-day drop since early June. Prices of the industrial metal used heavily in construction and manufacturing are about 10% below their April peaks, hurt by fears that trade tensions and slowing economic growth will crimp demand.

Analysts are keeping a close eye on copper and other industrial metals amid trade uncertainty because China is the largest source of demand, accounting for roughly half of global copper consumption. That is a main reason many view base metals prices as an economic indicator.

Hopes for a trade agreement and optimism about Chinese stimulus measures have boosted prices sporadically in recent months, while setbacks in talks have caused anxiety about a sharp demand slowdown.

Those worries intensified again Tuesday after Mr. Trump warned that the terms of a trade agreement with China would be tougher if he is re-elected next year. He also accused Beijing of not holding up its end of previous agreements.

“My team is negotiating with them now, but they always change the deal in the end to their benefit,” Mr. Trump tweeted.

Markets slid in May after talks between the two sides fell apart, though the talks have since restarted and expectations for lower interest rates have boosted stocks and other risky investments. Chinese and U.S. negotiators resumed trade talks Tuesday, with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin dining with Chinese representatives led by Chinese Vice Premier Liu He in Shanghai.

Some analysts are hopeful that easing monetary policy globally will spur economic growth, but many remain concerned that manufacturing activity and business investment will remain sluggish until the U.S.-China tariff fight is resolved.

In another sign of investor caution Tuesday, most-active gold futures rose 0.6% to $1,441.80 a troy ounce, extending their recent rally to six-year highs. Lower interest rates make the metal more attractive to yield-seeking investors, while increased geopolitical uncertainty also tends to boost the safe-haven asset.

In energy markets, U.S. crude-oil futures rose 2.1% to $58.05 a barrel on the New York Mercantile Exchange as analysts looked ahead to weekly figures on domestic stockpiles. Falling inventories have lifted oil lately, though prices remain stuck in their recent trading range. Brent crude, the global price gauge, added 1.6% to $64.72 a barrel on the Intercontinental Exchange.

Natural gas rebounded 1% to $2.1370 a million British thermal units, recovering slightly following a recent slide to three-year lows.

Write to Amrith Ramkumar at

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