Metal Market Surge: Record Prices Driven by China and the Fed

Raw Materials Surge Amidst Economic Stimuli

The prices of raw materials are soaring, fueled by new developments from China and the Federal Reserve.
The stimulus measures from the Chinese government, combined with the Fed’s decision to lower interest rates, have positively impacted metals and iron ore prices, which are closely linked to forecasts of increased economic growth.

Specifically, iron ore prices jumped another 1.8% on September 27, exceeding $100 per metric ton, while copper crossed the critical $10,000 mark per ton.
Gold reached yet another record high and silver hit a 12-year peak, exemplifying the surge in the precious metals sector.

Impact of Federal Reserve’s Decisions

The anticipation of further interest rate cuts by the Fed has driven up precious metal prices.
Gold bars have continued their upward trajectory, bolstered by accommodative monetary policy, which typically weakens the dollar.

Meanwhile, the financial markets are focused on China as it intensifies efforts to rejuvenate its economic growth.
Following the announcement of a robust stimulus package, speculation remains about its effectiveness in boosting consumer demand.
Nevertheless, both copper and iron ore have surged significantly.

Shining Precious Metals

Silver soared to its highest level since 2012, while gold also set a new record.
On September 26, silver increased by up to 2.8% to $32.71 an ounce, marking a 37% gain this year.
This rally coincided with a broader upswing in precious metals, although both metals slightly retreated after U.S.
job market data reflected resilience.

Silver has emerged as one of the top-performing commodities this year, benefiting from the Fed’s recent shift towards a more accommodating monetary policy and the anticipated interest rate cuts.

Copper and Iron Ore Boom

Copper prices surpassed $10,000 per ton and iron ore crossed the $100 threshold, following recent news from China.
Copper prices climbed by over 2% to reach a three-month high on the London Metal Exchange after China’s Politburo indicated strong support for a recovery in the real estate market through exceptional rate cuts.

This was followed by reports that suggest an injection of $142 billion capital into major state banks in China.
Such initiatives are part of broader measures aimed at stimulating China’s still-weak economy.
However, there are questions about whether these would sufficiently alleviate deflationary pressures or enhance consumption—both critical for metal demand.

Despite the excitement surrounding these price surges, analysts like Bart Melek from Toronto Dominion Bank caution that these policy responses may not lead to increased demand in the near term.
Copper recently closed up 2.7% at $10,080.50 per ton, while zinc rose 3.4% and aluminum 2.9%, with iron ore trading up to $101.25 per ton in Singapore—the highest price since September 2.