(Jan 28): Aluminium rose to the highest level in almost four years — and other base metals rallied — after US President Donald Trump appeared unperturbed by a steep decline in the dollar.
Asked what he thought about recent weakness in the currency, Trump told reporters it was “doing great”, adding to increasing bearish sentiment on the greenback. A gauge of the dollar tumbled almost 3% in the four sessions through Tuesday, making commodities priced in the currency cheaper for many buyers. Aluminium rose as much as 2.9% to US$3,300 a ton in London, the highest since April 2022.
Base metals have made a strong start to 2026. As well as the dollar weakness, driven by Trump’s erratic policymaking and attacks on the Federal Reserve, they’ve benefited from a rotation into harder assets. That’s been spurred by the debasement trade, where investors move away from currencies and sovereign bonds on concerns over fiscal deficits, while supply constraints have also aided some metals.
That’s the case with aluminium: China has a cap on smelter capacity, and it’s not yet clear how quickly producers in the rest of the world can ramp up to feed growing demand from the energy transition.
Goldman Sachs Group Inc raised its forecasts for aluminium. The bank, one of the more bearish commentators on the metal in recent months, sees it averaging US$3,150 a ton in the first half, up from US$2,575, but still below current prices, it said in a note.
See also: Embrace of weaker dollar fuels bets on new downtrend
However, Trina Chen, Goldman’s co-head of equity research, warned the rally in base metals was at risk due to the softening manufacturing consumption, especially in China. “We’re seeing some pullback in demand,” she said in a Bloomberg TV interview.
Aluminium rose 2.2% to US$3,278 a ton on the London Metal Exchange as of 2.24pm in Shanghai. Copper climbed 1.2% and zinc was up 1.2%. Iron ore declined 0.7% to us$102.95 a ton in Singapore.
Uploaded by Evelyn Chan
