Silver for July delivery SI1N +2.00% tracked gold higher in Monday’s metals trading, rallying 93 cents, or 2.6%, to $37.11 an ounce.
Sunday elections in Peru, a top exporter of gold, silver and other metals such as copper, zinc, and tin, point to the victory of Ollanta Humala.
Humala “advocates greater state control of natural resources,” so traders will be “extra watchful,“ said George Gero, vice president at RBC Wealth Management, in e-mailed comments.
Humala has tried to distance himself from Venezuelan leftist leader Hugo Chavez, choosing to model himself after Brazil’s left-leaning former president Luiz Inacio Lula da Silva, analysts at RBC wrote in a separate report.
“Despite his attempts to moderate his image, we believe there is still a significant amount of uncertainty” regarding Humala, they wrote.
His first test will be ongoing conflict between mining companies and farmers in southern Peru, where farmers are demanding revoking mining concessions.
The broader metals complex also traded higher.
Copper for July delivery HG1N +0.12% put on 1 cent, or 0.3%, to $4.15 a pound.
Copper is used extensively in wiring and construction, and analysts at Barclays Capital said the market has been dominated this year “by the degree and nature of softness in Chinese demand.” See Caixin report on major changes to China’s manufacturing sector.
“It is likely that as soon as Chinese import levels rise in the third quarter, and this feeds on a decline in LME stock levels, the overall fundamental architecture will be in place and convincing enough for copper prices to push to yet new record highs,” the analysts said.
Platinum for July delivery PL1N -0.02% gained $2.30, or 0.1%, to $1,826 an ounce, while the September contract for sister-metal palladium PA1U +1.10% added $10.50, or 1.3%, to $796.05 an ounce.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Virginia Harrison is a MarketWatch reporter based in Sydney.
