Copper shines anew on the last trading day of the week, following expectations on China’s further monetary easing.
On Thursday, the country reported a 7.9% expansion in its second quarter’s gross domestic product.
Although this is still a very impressive growth, this failed to notch the average analyst consensus given at an 8.1% increase.
This comes along with the People’s Bank of China’s announcement last week that it will require a lesser reserve threshold among the country’s banks.
The move ignites speculations that the PBOC might resort to becoming more dovish next, thus propelling prices upwards.
With this update, the copper price for September delivery added a robust 1.8% and settled at $4.35 per pound. It currently exchanges hands at $9,651.00 a ton at New York Comex.
The speculations on easing buoys metal prices up. This gives an extension to the supercycle that has stumbled into a hiatus in the past week.
The favorite industrial metal moved back and forth at $9,250.00 to $9,550.00 for a longer than expected time. Analysts earlier gave a price support projection between $9,103.00 to $9,263.00 a ton.
This settlement is significantly lower than its average price levels in the first months of the year when it consistently climbed to record highs.
There has been an overall shift in seasonal demand, with Chinese imports in June hitting only 428,438 mt. This translates to a 3.9% decline compared to May figures.
Earlier, the Chinese government announced plans to be self-sufficient in battery supplies. It aims to notch 75% of the global supply of lithium-ion batteries and 60% of electric car batteries.
Gold Price Declines Conservatively
Meanwhile, the gold price failed to dodge the pressure and declined conservatively during the day.
The bullion’s futures contract fell 0.05% to $1,828.10 an ounce, clocking in a 1.2% hike for the week.
It managed to nurse the fall it incurred in the past weeks after the unprecedented market shift towards a more hawkish stance.
The recent reason behind the surge is the Federal Reserve Jerome Powell’s recent statement during the second day of his testimony before the US Congress.
The policymaker said that he would continue to assert powerful support for the US economy, as macroeconomic conditions remain fragile.
On the other hand, spectators said that the Fed might suddenly resort to a hawkish stance by 2022, as conditions continue to improve. By then, gold price’s only support could only come from the onset of inflation.