Copper Futures Post Modest Gains Amid Europe Debt Worries

Strategic Insights -

Copper futures saw modest gains on Tuesday as concerns about Europe's debt problems temporarily eased, with German Chancellor Angela Merkel seeking to reassure markets that Germany is committed to helping Greece through previously announced measures. However, traders remain cautious and are looking to U.S. economic data due Wednesday for signs of a stronger economy. The most actively-traded contract, for December delivery, settled up 0.45 cents, or 0.1%, at $3.9700 a pound on the Comex division of the New York Mercantile Exchange.

Key Takeaways:

  • Copper futures posted modest gains on Tuesday, with the most actively-traded contract for December delivery settling up 0.45 cents, or 0.1%, at $3.9700 a pound.
  • German Chancellor Angela Merkel sought to calm worries about Europe's debt problems, stating that it will be a "very long, step-by-step process" to address the issues.
  • Traders remain cautious due to ongoing concerns about Europe's sovereign debt crisis, with copper demand closely tied to economic growth.
  • A weaker dollar helped copper carve out modest gains on the day, with the ICE Dollar Index recently down 0.4% at 76.884.
  • Benchmark U.S. stock indices were slightly higher, with the Standard & Poor's 500 index recently up 7.65 points, or 0.7%, at 1170.92.
  • Copper futures have been moving in the same direction as stocks for much of the past month, with a 30-day average correlation between the two at positive-0.8.
  • Technical analysts are watching for a potential bearish pattern to form if copper trades below $3.9500 tomorrow.

Statistics:

  • Copper futures settled up 0.45 cents, or 0.1%, at $3.9700 a pound on the Comex division of the New York Mercantile Exchange.
  • The ICE Dollar Index was recently down 0.4% at 76.884.
  • Benchmark U.S. stock indices were slightly higher, with the Standard & Poor's 500 index recently up 7.65 points, or 0.7%, at 1170.92.
  • The 30-day average correlation between copper futures and U.S. stock indices is at positive-0.8.

Sources:

  • Dow Jones Commodities News (2011-09-13)
  • Tatyana Shumsky, Dow Jones Newswires (2011-09-13)
  • Sucden Financial
  • Sterling Smith, Analyst with Country Hedging
  • Comex division of the New York Mercantile Exchange
  • ICE Dollar Index
  • Standard & Poor's 500 index