Copper Futures Rise to Two-Week Highs Amid Optimism Over Economic Growth

Strategic Insights -

Copper futures surged to a two-week high on Thursday, with traders betting that demand for the metal wouldn't be derailed by economic slowdown signs. The September copper contract rose 2.3% to $4.0915 a pound on the Comex division of the New York Mercantile Exchange, with the highest intraday price since August 8. Traders are looking ahead to Friday's speech by Federal Reserve Chairman Ben Bernanke, seeking hints at further support for the struggling U.S. economy.

Key Takeaways:

  • Copper futures rose 2.3% to $4.0915 a pound, the highest intraday price since August 8.
  • Traders are optimistic about the economic growth outlook, despite signs of slowing growth.
  • The copper market is sensitive to economic growth, as it is used in construction and industry.
  • Traders are also looking ahead to Bernanke's speech on Friday, hoping for hints at further stimulus.
  • Some market participants believe a failure to provide extra stimulus could lead to a sell-off in the market.
  • Rob Kurzatkowski, senior commodity analyst with optionsXpress, said traders are feeling better about the economy's state, describing it as "better than a double-dip recession."
  • MF Global analyst Edward Meir warned that markets could react negatively to Bernanke's speech if he fails to provide the expected stimulus.

Statistics:

  • Copper futures rose 9.35 cents, or 2.3%, to $4.0915 a pound.
  • The highest intraday price since August 8 was $4.104 a pound.
  • Copper futures fell from near $4.50 a pound to below $3.90 earlier this month.
  • The metal is used in construction and industry, making it sensitive to economic growth outlook.
  • The economic growth and demand outlook for copper can be influenced by equities markets as proxies.
  • Bernanke's speech is scheduled for Friday at the Fed's annual retreat in Wyoming.

Sources:

  • Dow Jones Commodities News via Comtex
  • Comex division of the New York Mercantile Exchange
  • optionsXpress: Rob Kurzatkowski, senior commodity analyst
  • MF Global: Edward Meir, analyst
  • Dow Jones Newswires: Matt Day and Tatyana Shumsky