Tariff Threats Weigh on Metals

By Christopher Alessi

LONDON--The price of copper and other base metals fell Monday morning in the wake of heightened trade tensions between the U.S. and China.

Copper was down 1.09% at $6,108.50 a metric ton, on the London Metal Exchange in midmorning trade.

"The trade dispute between the U.S. and China, which continued to escalate over the weekend, is driving almost all metals prices down as the new week begins," analysts at Commerzbank wrote in a note Monday.

China said late Friday it is planning to impose tariffs on a majority of its U.S. imports, ranging from 5% to 25%, following the Trump administration's threats earlier last week to more than double proposed tariffs on a further $200 billion worth of Chinese goods.

Over the weekend, President Donald Trump tweeted that tariffs on China are "working far better than anyone ever anticipated."

"The trade dispute will presumably keep the metals markets on tenterhooks for some time yet, and should remain the key driver of prices, at least in the near future," according to Commerzbank.

China is the world's largest consumer of industrial metals like copper.

Meanwhile, gold price edged down on the back of a stronger U.S. dollar.

The price of gold was down 0.29% at $1,209.98 a troy ounce Monday morning.

"Heavy selling in gold comes despite growing trade tensions between the U.S. and China," analysts at ING Bank wrote in a note Monday. "Instead, rising interest rates, and a stronger dollar appear to be driving this selloff."

Dollar-denominated commodities like gold tend to have an inverse relationship with the greenback. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 of its peers, was up 0.26% Monday.

Among other precious metals, silver was down 0.76%, at $15.35 a troy ounce, palladium was down 0.20%, at $910.22 a troy ounce and platinum was down 0.32%, at $829.30 a troy ounce.

Among other base metals, zinc was down 1.88% at $2,558.50 a metric ton, aluminum was up 0.25% to $2,033.00 a metric ton, tin was down 0.08% at $19,615.00 a metric ton, nickel was down 1.33% to $13,330.00 a metric ton and lead fell 1.63% to $2,078.00 a metric ton.

Write to Christopher Alessi at [email protected]