The US economy is growing moderately after a winter swoon and likely strong enough to support an interest rate increase by the end of the year, but concerns remain over the recovery of the labour market, Federal Reserve officials said.
Beijing continued to roll out measures to support its economy, brightening the outlook for metals medium term. China will step up “effective investment’’ in key sectors, including shantytown renovation and rural power infrastructure, to support growth, the cabinet said, even as it saw more positive factors in the economy. There were some signs that measures so far are having an effect.
Meanwhile, traders are shunning the industrial metals, which need a strong underpinning in the economy within the manufacturing sector. Though housing and auto sales, major demand factors in the copper sector, remain upbeat, industrial consumption and manufacturing are not keeping pace with optimistic views.
An economy based on easy lending and an expanding monetary supply could create more inflation and a less solid base from which to build a lasting economic expansion, hence the mantra: buy the yellow metal, sell the red metal.