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Copper Futures Correct Lower Amid Global Market Volatility

Strategic Insights

— 1 min read

Copper futures corrected lower on Monday as global equities fell, with the dollar strengthening, according to Dow Jones Commodities News. The most-active December copper contract fell 6.55 cents to settle at $2.7855 per pound on the Comex division of the New York Mercantile Exchange. Market analysts attributed the decline to a combination of factors, including the weakening of the Chinese equity market, a strong rally in the dollar, and soft U.S. economic data.

Key Takeaways:

  • Copper futures corrected lower on Monday, with the most-active December contract falling 6.55 cents to settle at $2.7855 per pound on the Comex division of the New York Mercantile Exchange.
  • The price drop was attributed to a combination of factors, including the weakening of the Chinese equity market, a strong rally in the dollar, and soft U.S. economic data.
  • As of Monday, inventories of copper stored in London Metal Exchange warehouses rose 1,175 metric tons, leaving them at 294,050.
  • The correlation between copper and the Shanghai Composite Index has increased to 89%, up from 30% in 2006-2008, according to Deutsche Bank.
  • OptionsSellers.com analyst Michael Gross noted that copper tends to be a leader among industrial commodities when the market is factoring in economic weakness or strength.
  • Gross also suggested that the current technical uptrend may be broken if copper prices continue to fall.

Statistics:

  • Copper futures fell 6.55 cents to settle at $2.7855 per pound on the Comex division of the New York Mercantile Exchange.
  • Inventories of copper stored in London Metal Exchange warehouses rose 1,175 metric tons, leaving them at 294,050.
  • The correlation between copper and the Shanghai Composite Index increased to 89%, up from 30% in 2006-2008.
  • The U.S. dollar index rose 0.420 point to 79.425.
  • The Dow industrials fell around 170 points.

Sources:

  • Dow Jones Commodities News via Comtex (Aug 17, 2009)
  • Deutsche Bank (Joel Crane, metals strategist)
  • OptionsSellers.com (Michael Gross, broker and futures analyst)
  • Dow Jones Newswires (Allen Sykora, 541-318-8765, allen.sykora@dowjones.com)

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