Copper Rebounds as Osborne Seeks to Calm Markets After Brexitby and
Chancellor says contingency plans in place, spoke with BOE
Copper gains as PBOC adviser comments on currency reserves
Copper rose, reversing earlier declines, as U.K. Chancellor of the Exchequer George Osborne sought to reassure markets following Britain’s vote to leave the European Union.
Contingency plans were in place to shore up the economy amid market volatility, Osborne said in a statement Monday, adding that he had been in contact with Bank of England Governor Mark Carney over the weekend to add to existing planning. Copper slid 1.7 percent on Friday as the U.K.’s decision to exit the EU caused turmoil across markets.
Copper also gained after Huang Yiping, an adviser to the People’s Bank of China, said the world’s biggest commodities consumer can use its foreign-exchange reserves to balance the market if the yuan comes under short-term pressure. The government may accelerate the reform of state-owned companies in the second half of this year, Huang said at the World Economic Forum in Tianjin.
“We’re going to have a parade of central bankers say, ‘Hey we’re here for you,’” Bart Melek, head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “As lousy as this looks, it’s still not a total disaster here, and we’re hearing the People’s Bank of China and other central banks around the world will add support to the economy.”
Copper for delivery in three months rose 0.3 percent to settle at $4,710 a metric ton ($2.14 a pound) at 5:50 p.m. on the London Metal Exchange, after falling as much as 0.9 percent.
“Market participants clearly expect the Chinese authorities to take monetary-policy measures in the next few weeks in a bid to minimize the negative impacts of the Brexit on Asia’s largest economy,” Commerzbank AG said in a note to investors Monday.
In other metals:
- Copper futures for September delivery gained 0.4 percent to $2.1255 a pound on the Comex in New York.
- Aluminum, zinc, nickel, lead and tin dropped on the LME.