Copper Futures Fall Amid Market Correction

Copper futures plummeted on Tuesday, correcting alongside other outside markets. The sudden drop was attributed to the correction in the stock market, which has been a concern for investors. Experts attribute the copper market's vulnerability to profit-taking by spec funds and the natural pullback in other markets. As the market consolidates, investors are watching for buying opportunities, particularly in the housing market and the expected seasonal pick-up in copper demand.

Key Takeaways:

• Copper futures fell 2.45 cents to settle at $2.5205 per pound on the Comex division of the New York Mercantile Exchange.
• The stock market correction is believed to have triggered concerns about the economy and future copper demand.
• Experts, including Shawn Hackett, president of Hackett Financial Advisors, and Dave Meger, senior metals analyst with Alaron Trading, attribute the copper market's pullback to profit-taking by spec funds and consolidation in other markets.
• The housing market, despite recent declines, is still supporting copper prices, and Chinese demand is expected to continue to hold steady.
• Nearby support for September copper lies around $2.50 to $2.48, and further support is expected around $2.40.
• Resistance for the copper price is pegged around Monday's peak of $2.5790 and the $2.70-2.72 area.

Statistics:

• Copper futures fell 2.45 cents to $2.5205 per pound.
• The stock market correction resulted in a 75-80 point drop in the Dow industrials.
• September crude oil fell $1.50 a barrel.
• The euro dropped to $1.4161 from $1.4233.
• Copper inventories in London Metal Exchange warehouses rose 1,500 metric tons to 278,925.
• Comex inventories decreased 587 short tons to 56,192 short tons.

Sources:

• Dow Jones Commodities News via Comtex (Jul 28, 2009)
• Hackett Financial Advisors
• Alaron Trading
• Allen Sykora, Dow Jones Newswires; allen.sykora@dowjones.com