Citi Says US Election Risk to Contain Metals Prices for Now

Uncertainty around the US presidential election in November will prevent meaningful gains for metals by subduing global risk appetite and possibly delaying government stimulus in China, according to Citigroup Inc.

“We think Fed rate cuts, further China policy easing, and an upturn in global manufacturing sentiment will be more constructive for metals pricing in late fourth quarter/early 2025, once the US election is behind us,” analysts including Tom Mulqueen wrote in a note, referring to the Federal Reserve.

Metals from copper to aluminum have retreated in recent months on concerns that Chinese demand will slow, coupled with jitters over the global economy. Goldman Sachs Group Inc. fueled an increasingly cautious tone across commodities by slashing $5,000 from its 2025 copper forecast earlier this week.

In the November contest, Republican nominee and former President Donald Trump will face off against Vice President Kamala Harris in what’s expected to be a close battle. In a recent national poll of likely voters published by Emerson College, Harris leads her rival by 49% to 47%.

Metals were down across the board Friday after the monthly US jobs report showed hiring fell short of forecasts in August following downward revisions to the prior two months. That will likely fuel ongoing debate over how much the Fed should cut interest rates.

Copper is heading for a second straight weekly decline on the London Metal Exchange, and aluminum is on track for its eighth consecutive daily loss. Zinc has slumped this week amid more woes in China’s steel market.

Citigroup held its three-month forecasts at $9,500 for copper and $2,500 for aluminum and said an eventual recovery in global growth should help lift prices. Still, the threat of new or higher tariffs should Trump return to the White House “remains a key risk to the growth rebound narrative,” it said.

With assistance from Mark Burton and Sana Pashankar.

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