Copper Futures Rally on Economic Sentiment and Weaker Dollar

Strategic Insights -

Copper futures continued their upward momentum on Thursday, rising 9.05 cents, or 3.2%, to settle at $2.9140 a pound on the Comex division of the New York Mercantile Exchange. The rally was attributed to improving economic sentiment and a weaker US dollar, setting the stage for a possible breach of $3 next week. The European Union's statistics agency reported a gross domestic product fall of just 0.1% in the euro zone, while national data from France and Germany showed unexpected quarterly growth. Economists and analysts attributed the copper rally to stronger sentiment on the US economy and a weaker dollar, with some predicting a continued upward momentum.

Key Takeaways:

  • Copper futures rallied 9.05 cents, or 3.2%, to settle at $2.9140 a pound on the Comex division of the New York Mercantile Exchange.
  • The rally was attributed to improving economic sentiment and a weaker US dollar, with the ICE Futures US dollar index down 0.46%.
  • The European Union's statistics agency reported a gross domestic product fall of just 0.1% in the euro zone, while national data from France and Germany showed unexpected quarterly growth.
  • Economists and analysts attributed the copper rally to stronger sentiment on the US economy and a weaker dollar, with some predicting a continued upward momentum.
  • Triland Metals research noted that the rally was initially the result of stronger sentiment on the US economy after the Fed's outlook speech following the FOMC rate decision.
  • Ralph Preston, a senior market analyst at Heritage West Financial, said that the European economic news and the weaker dollar are "just giving the copper market reason to run at the moment."

Statistics:

  • Copper futures rose 9.05 cents, or 3.2%, to settle at $2.9140 a pound on the Comex division of the New York Mercantile Exchange.
  • The ICE Futures US dollar index was down 0.46% shortly after copper closed.
  • Inventories of copper stored in London Metal Exchange warehouses fell 425 metric tons on Thursday, leaving them at 291,975.
  • The most recent Comex inventory data, released late Wednesday, were down 263 short tons at 53,688 short tons.

Sources:

  • Dow Jones Commodities News via Comtex, "Copper futures rally on economic sentiment", 13 August 2009.
  • European Union's statistics agency, Eurostat, "Gross domestic product in the 16-nation euro zone fell by just 0.1%", 13 August 2009.
  • Triland Metals research note, quoted in Dow Jones Commodities News via Comtex, 13 August 2009.
  • Ralph Preston, senior market analyst at Heritage West Financial, quoted in Dow Jones Commodities News via Comtex, 13 August 2009.