LONDON- Copper failed to respond positively to China boosting bank lending because the trade dispute between the biggest metals consumer and the United States still weighed on the market.
China’s central bank said it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing 900 billion yuan ($126 billion) in liquidity to shore up the slowing economy.
The central bank, however, said there would be “no flood-like stimulus”.
“It comes on top of the last couple of days, where we saw the market recover quite strongly. It raises the question of how much further the market can rally at this stage while the trade war is still on,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“Some additional stimulus measures had been expected, so I think that’s probably adding to the lack of reaction.”
Copper rebounded from a two-year low hit on Tuesday after the United States and China agreed to hold further trade talks to resolve a dispute that has weakened global growth and metals consumption.
On Friday, a White House adviser said talks between US and Chinese trade negotiators could “heat up” during meetings in October.
Benchmark copper on the London Metal Exchange slipped 0.2 percent to $5,834 a ton in final open outcry trading. – Reuters