Copper Prices Edge Lower Amid Stronger Dollar and G-20 Disappointment

Strategic Insights -

Copper prices suffered a 0.7% decline to $3.5645 a pound on the Comex division of the New York Mercantile Exchange, as a stronger dollar and the disappointing outcome of the G-20 meeting weighed on investor sentiment. The labor market showed modest improvement, but copper traders remained cautious, particularly with Europe's sovereign-debt crisis still unfolding. Copper futures had earlier gained traction due to revised U.S. jobs data, but weakened as traders focused on China's inventory data, which showed an unexpected gain.

Key Takeaways:

  • Copper prices settled down 2.40 cents, or 0.7%, at $3.5645 a pound on the Comex division.
  • A stronger dollar hurt demand for dollar-denominated commodities among buyers who use foreign currencies.
  • The G-20 meeting left attendees empty-handed, with no country committing to help finance the euro zone's bailout fund.
  • Copper-market participants are closely following Europe's struggle to curb the spread of its sovereign-debt crisis, as the region is a key consumer of the metal.
  • China, the world's largest consumer of copper, saw its weekly inventory data from the Shanghai Futures Exchange show a gain of 10,100 tons.
  • Copper-trading volumes were light, with some market watchers attributing the recent lull to the MF Global bankruptcy.

Statistics:

  • Copper prices declined 2.40 cents, or 0.7%, to $3.5645 a pound on the Comex division.
  • The dollar traded at a 0.7% premium against a basket of currencies compared to the previous day.
  • The G-20 meeting concluded with no commitments to finance the euro zone's bailout fund.
  • Copper stocks rose 10,100 tons to 83,868 tons at the Shanghai Futures Exchange.
  • The oral testimony from former MF Global clients on the Comex has transferred around 10% of their accounts to new clearing firms.

Sources:

  • Dow Jones Commodities News via Comtex, Nov 04, 2011
  • Dow Jones Newswires
  • Comex
  • CME Group Inc.
  • RBC Capital Markets
  • optionsXpress
  • Shanghai Futures Exchange
  • Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; tatyana.shumsky@dowjones.com