Copper Futures Rally on Expectations of Firm Equity Market

A firm equity market and gains in other commodities like gold and crude oil have sparked speculative buying interest in copper futures, with prices rising 0.54% to $3.0250 per pound on the Comex division of the New York Mercantile Exchange. Traders are keeping a close eye on the equity market for guidance, but doubts persist about the sustainability of the rally given the weak economic picture.

Key Takeaways:

• Copper futures are up 1.60 cents, or 0.54%, at $3.0250 per pound on the Comex division of the New York Mercantile Exchange.
• The rally in copper is linked to a firm equity market, with gold futures up 1.5% and crude oil 2.4% higher.
• Traders are cautious about the sustainability of the rally due to the weak economic picture, with the US trade deficit unexpectedly widening 4.8% in May to $42.27 billion.
• Aluminum producer Alcoa Inc. reported a $136 million profit on stronger-than-expected 22% revenue growth, but this is seen as insufficient to give copper any serious lift in the near term.
• Scott Meyers, senior trading analyst with Pioneer Futures, believes the current rally in equities "will not sustain" and copper's next significant move will likely be lower.

Statistics:

• Copper futures are up 0.54% to $3.0250 per pound.
• Gold futures are up 1.5%.
• Crude oil is up 2.4%.
• The US trade deficit widened 4.8% to $42.27 billion in May.
• The US trade deficit has been at its widest since November 2008.
• Alcoa Inc.'s revenue grew 22% year-over-year.
• Alcoa Inc.'s revenue growth was stronger than expected.

Sources:

• Dow Jones Newswires
• Comtex
• Commerce Department
• Pioneer Futures (MF Global)
• Alcoa Inc.