Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
After dropping to a four-month low in early August, copper prices have steadily risen in recent weeks. Supported by new investor demand and market optimism over a forthcoming interest rate cut in the U.S., copper prices reached a nearly six-week high on Tuesday (August 27 local time). Ole Hansen, the head of commodity strategy at Saxo Bank, noted that part of the recent increase in copper prices is attributed to hedge funds reigniting demand after reducing exposure to base metals during a significant pullback.
In a research report published last Friday, Hansen stated, “We believe the worst of the pullback period is over, but fundamental demand needs to improve for a stronger recovery in copper prices. Once the Federal Reserve begins its long-anticipated interest rate cut cycle, the lowering of financing costs may encourage inventory restocking. Until then, traders will continue to look for signs of improvement, especially through reductions in warehouse stock levels monitored by the three major futures exchanges.”
Later last week, Federal Reserve Chairman Jerome Powell further raised expectations for a rate cut at the Fed’s meeting on September 18. Powell stated on Friday, “Now is the time to adjust policy,” but he declined to disclose the specific timing or magnitude of the cuts.
The market generally believes that copper prices may benefit from a U.S. interest rate cut, as the anticipated loose monetary policy is expected to ease the financial pressures on manufacturers and construction companies.
Wall Street banks have been optimistic about copper prices this year, citing supply risks and the increasing demand for metals essential to the energy transition. In fact, Citi analysts indicated in early April that the second long-term copper bull market of this century is underway—approximately 20 years after the first bull market.
On Tuesday, September copper futures on the New York Mercantile Exchange briefly hit $4.3065 per pound, the highest level since July 18. The futures ultimately closed up 0.4% at $4.2365 per pound. Meanwhile, three-month copper on the London Metal Exchange rose 1.3% to around $9,406 per ton.
