Copper Prices Surge to Two-Week High Following Reports of US-Iran Truce Agreement

Copper Reaches Two-Week High as US and Iran Nearing Diplomatic Resolution

Copper prices surged to a two-week high on Thursday, driven by speculation that the US and Iran are nearing a diplomatic resolution to the Middle East conflict. The red metal settled 1.3% higher on the London Metal Exchange, reaching its highest level since May 14.

The escalation of tensions in the Middle East has had a significant impact on global markets, fueling inflation and reducing prospects for global growth. However, a potential end to the conflict would ease concerns about a prolonged hit to global growth, which would in turn crimp metals demand from manufacturers.

In recent weeks, base metals have traded in a tight range, with investors closely monitoring negotiations to end the conflict. The optimism surrounding a ceasefire deal spilled into other corners of the copper market, with investors of exchange-traded funds betting that miners will benefit from a rally in metal prices.

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Traders bought 21,000 bullish options spreads on the Global X Copper Miners ETF on Thursday, on hopes the fund could rise sharply by September. The trade stands to profit if the ETF climbs above $100, with gains capped once it reaches $120.

Copper prices settled at $13,701.50 a metric ton in London, while other LME metals also gained. Zinc prices rose 1.1%, and nickel prices increased by 0.8%.