LONDON- Copper bounced on Monday despite worries that spreading COVID-19 infections in top metals consumer China could hit demand while nickel slumped in thin trade amid uncertainty about short positions in the market.
Three-month copper on the London Metal Exchange (LME) gained 0.6 percent to $10,331 a ton after two sessions of losses.
The market is nervous because COVID continues to spread in Shanghai, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“But the return to these levels from $10,500 last week may be attracting some bottom fishing,” he added.
China’s financial hub of Shanghai launched a planned two-stage lockdown to contain a coronavirus surge, adding to worries about growth prospects for the world’s second-biggest economy.
Hansen said investors were also wary after a key measure of the US bond yield curve inverted for the first time since 2006 in a sign that recession risks are increasingly being priced in.
“The yield curves in the US are screaming that we are heading towards an economic slowdown, which could lead to lower demand on a global perspective,” he said.
