Goldman’s ‘favorite’ commodity has been on a tear, and could have further to run

Copper prices have experienced a remarkable resurgence since the late March crash, hitting two-year highs last week, and Goldman Sachs believes the rally has further to run.

Often seen as a bellwether for the global economy, copper prices plunged at the end of March as the coronavirus pandemic spread throughout the world and sent markets tumbling.

However, the spot price has recovered rapidly from $2.1195 a pound on the New York Mercantile Exchange on March 23 to $2.9580 a pound on Friday. It is up 5.87% for the year and 9% for the quarter, initially buoyed by a sharp pickup in Chinese demand.

“While this contrasts sharply with the c.5% average decline in share prices for the Big 4 diversified miners (Anglo, BHP, Glencore, RIO), we remain bullish on the sector on a global economic recovery, led by China,” Goldman Sachs metals and mining analysts said in a note Friday.