Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
On Tuesday this week, copper prices rose for the first time in five trading days, driven by measures taken by China to stabilize the market, a weakening US dollar, and a decrease in London Metal Exchange inventories. The futures price of copper for delivery in March on the New York Mercantile Exchange reached $3.78 per pound, equivalent to $8,316 per ton, representing a 0.3% increase from Monday’s closing price.
Reports suggest that the Chinese government indicated its intention to support the stock market, with Central Huijin Investment Ltd. expanding its ETF holdings. There are also reports that national leaders plan to meet with market regulators. Stimulated by this series of market support signals, the Chinese stock market achieved its largest single-day increase in two years.
Copper, known as the “Doctor Copper,” is commonly used in electrical equipment, industrial machinery, construction, and wiring, and serves as an indicator of economic development. The latest Purchasing Managers’ Index (PMI) data indicates that global manufacturing is in the process of recovery, which will benefit industrial metals, including copper.
As the world’s largest consumer of copper, China’s macroeconomic policies have a significant impact on copper prices. In recent years, the Chinese government has implemented a series of moderately expansionary macroeconomic policies, including increasing infrastructure investment, and promoting the development of new energy vehicles, in order to stabilize economic growth and drive industrial upgrading. These policies are conducive to increasing demand for copper, providing some upward momentum for copper prices.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that after the significant surge in the Chinese stock market, there are signs of stabilization in the Chinese yuan exchange rate.
At the same time, data shows that copper inventories in registered warehouses of the London Metal Exchange have further decreased to a five-month low. The US dollar saw a slight decline on Tuesday, leading to a decrease in the cost for buyers using other currencies to purchase dollar-denominated metals.
In the short term, due to the approaching Chinese New Year, short-term demand for copper is suppressed.
Looking ahead, with the recovery of manufacturing and the economy, a reduction in supply-side output, and the drive from new demand stemming from energy transformation, analysts predict that copper prices will soar by over 75% and reach historic highs by 2025. Investors’ confidence in copper may reflect the market’s expectations for the future economy – copper is currently a key metal resource in the energy transition.”
