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Copper Futures Bounce Back on Weakening US Dollar

Strategic Insights

— 1 min read

Copper futures experienced a significant rebound on Tuesday after a day of sharp retreat due to fund selling. The weakening US dollar provided support to copper, with September copper futures rising 6.8 cents to settle at $2.2120 a pound on the Comex division of the New York Mercantile Exchange. This bounce back was attributed to the lower dollar making dollar-denominated commodities less expensive in other currencies, boosting demand. Experts such as Michael Gross, broker and futures analyst with OptionSellers.com, and Pat Donnelly, senior broker with Peak Trading Group, noted that copper may have become slightly oversold during the previous session's dip.

Key Takeaways:

  • Copper futures rose 6.8 cents to settle at $2.2120 a pound on the Comex division of the New York Mercantile Exchange on Tuesday.
  • The weakening US dollar provided support to copper, making it less expensive in other currencies and boosting demand.
  • Experts believe that copper may have become slightly oversold during the previous session's dip.
  • George Gero, vice president with RBC Capital Markets Global Futures, stated that September copper has a premium over the July contract beyond normal contango due to expected Chinese buying and increased infrastructure construction.
  • There is concern about the Chinese economy and its potential impact on copper prices if growth stumbles.
  • Inventories of copper stored in London Metal Exchange warehouses fell 1,325 metric tons, leaving them at 276,275.

Statistics:

  • Copper futures rose 6.8 cents to settle at $2.2120 a pound on the Comex division of the New York Mercantile Exchange on Tuesday.
  • The US dollar index was down more than 1.2% after copper closed.
  • Copper inventories stored in London Metal Exchange warehouses fell 1,325 metric tons, leaving them at 276,275.
  • September copper has a premium over the July contract beyond normal contango, valued at an undisclosed amount.

Sources:

  • Dow Jones Commodities News via Comtex
  • OptionSellers.com
  • Peak Trading Group
  • RBC Capital Markets Global Futures
  • Dow Jones Newswires
  • Reuters

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