Copper Futures Fall Amid Uncertainty Over Italian Government

Copper futures declined for a third consecutive day on November 8, 2011, as investors remained cautious about the Italian government's stability due to the country's struggling economy and debt crisis. The uncertainty surrounding the Italian government led to losses in copper futures, with the Comex December copper contract settling at $3.533 a pound, a 0.25 cent decline. However, after the announcement of Italian Prime Minister Silvio Berlusconi's resignation, copper futures rose in after-hours trade, mirroring gains in U.S. equities and the euro.

Key Takeaways:

• Copper futures fell for the third consecutive day due to uncertainty over the Italian government's stability.
• The Comex December copper contract settled at $3.533 a pound, a 0.25 cent decline.
• The announcement of Italian Prime Minister Silvio Berlusconi's resignation led to a 0.4% rise in copper futures in after-hours trade.
• Copper futures are sensitive to changes in the economic outlook, particularly in the construction and manufacturing sectors.
• The European debt crisis is expected to limit demand for raw materials, affecting copper prices.
• Market participants are looking forward to economic data from China, which is scheduled to report inflation and industrial production figures on Wednesday.
• Analysts are cautious about the short-term sentiment in industrial metals, with some predicting a sideways-to-lower trend for copper futures by the end of the year.
• Barclays Capital analyst Gayle Berry notes that industrial metals, including copper, have yet to decide on a clear direction amid the financial stress in Europe.

Statistics:

• Copper futures fell 0.1% to settle at $3.533 a pound on the Comex division of the New York Mercantile Exchange.
• Copper futures rose 0.4% in after-hours trade following the announcement of Silvio Berlusconi's resignation.
• The Italian government's bond market has witnessed increased borrowing costs, raising concerns about the country's financial position.
• China is scheduled to report inflation and industrial production figures on Wednesday, followed by trade data on Thursday.

Sources:

• Dow Jones Commodities News via Comtex, "Comex December copper settles 0.25 cent lower at $3.533 a pound"
• Dow Jones, "Copper falls for a third day as investors cautious on euro-zone outlook"
• OptionSellers.com, analyst Michael Gross
• Barclays Capital, analyst Gayle Berry
• Standard Chartered, analyst Dan Smith
• Dow Jones Newswires, Matt Day (212-416-4986, matt.day@dowjones.com)
• Dow Jones Newswires, Francesca Freeman (END)