Copper Futures Dip Amid Housing Concerns and Strengthening U.S. Dollar

Strategic Insights -

Copper prices continued their downtrend on Monday, Dec 31, 2007, as the metal struggled with concerns over the housing market and a strengthening U.S. dollar. The most-active March copper contract fell 3.1 cents to settle at $3.0410 per pound on the Comex division of the New York Mercantile Exchange. Analysts attributed the decline to the ongoing impact of the weak housing market and the dollar's recovery. Despite a slight increase in existing home sales, new-home sales data released Friday had a more significant impact on copper prices.

Key Takeaways:

  • Copper futures took a slight dip, falling 3.1 cents to settle at $3.0410 per pound on the Comex division of the New York Mercantile Exchange.
  • The downtrend in copper prices was attributed to concerns over the housing market and a strengthening U.S. dollar.
  • Analyst Eric Wittenauer of A.G. Edwards noted that new construction tends to matter more in the copper market than existing home sales.
  • The dollar's recovery weighed on copper prices, with the greenback up nearly 0.6% at 76.669 points on an ICE Futures U.S. index.
  • Tom Duffy, senior derivatives specialist with Infinity Futures Inc., predicted a potential retracement back to the 296.50 area, which could set the stage for a bounce back into the $3.20 area.
  • Copper inventories stored in London Metal Exchange warehouses fell 900 metric tons, leaving them at 197,450.
  • Comex inventory data were down 110 short tons at 15,494.

Statistics:

  • Copper futures fell 3.1 cents to settle at $3.0410 per pound.
  • The U.S. dollar was up nearly 0.6% at 76.669 points on an ICE Futures U.S. index.
  • Copper inventories stored in London Metal Exchange warehouses fell 900 metric tons to 197,450.
  • Comex inventory data were down 110 short tons at 15,494.

Sources:

  • Dow Jones Commodities News via Comtex, Dec 31, 2007
  • Eric Wittenauer, analyst with A.G. Edwards
  • Tom Duffy, senior derivatives specialist with Infinity Futures Inc.
  • Matt Whittaker, Dow Jones Newswires, 201-938-5959, matt.whittaker@dowjones.com
  • ICE Futures U.S. index
  • London Metal Exchange warehouses
  • Comex division of the New York Mercantile Exchange