Copper Futures Retreat as Investor Interest Wanes Amid Strengthening US Dollar

Copper futures saw a decline on Monday morning as investor interest waned, coinciding with a rally in the US dollar following stronger-than-expected US payrolls data on Friday. Despite the short-term trend indicating the unwinding of dollar selling and commodities buying that has supported copper, signs of economic strengthening are expected to support the metal in the long term. Benchmark copper for March delivery dropped 6.1 cents to $3.1765 a pound on the Comex division of the New York Mercantile Exchange.

Key Takeaways:

Copper futures declined by 6.1 cents to $3.1765 a pound on the Comex division of the New York Mercantile Exchange, with benchmark prices reaching a new low.
The decline in copper prices is attributed to a stronger US dollar and a decrease in investor interest, despite the metal's historical correlation with economic data and industrial activity.
Analysts at Standard Bank expect large dips in copper prices to be bought, indicating a long-term support for the metal.
US nonfarm payrolls data released on Friday showed a slowdown in job losses, with a decrease in the unemployment rate from 10.2% to 10%.
Copper prices erased slight losses to climb into positive territory on the news of strong US economic data on Friday.
Warehouse inventories of copper continue to rise, with a 6,475 metric ton increase on Monday, leaving a total of 452,550 metric tons in London Metal Exchange warehouses.
Demand signals for copper are not as strong, as the metal is widely used in construction, electronics, and automobiles.

Statistics:

Copper futures declined by 6.1 cents to $3.1765 a pound on the Comex division of the New York Mercantile Exchange.
US nonfarm payrolls data showed a decrease of 10,000 jobs in November, compared to a decrease of 111,000 jobs in October.
The unemployment rate in the US declined from 10.2% to 10% in November.
Copper warehouse inventories rose by 6,475 metric tons to 452,550 metric tons in London Metal Exchange warehouses.
Comex inventory data increased by 753 short tons to 89,296 short tons.
Shanghai Futures Exchange data showed a weekly rise of 3,433 metric tons to 104,710.

Sources:

- Dow Jones Commodities News via Comtex (Dec 07, 2009)

- Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com (END)

- Dow Jones Newswires 12-07-09 0918ET