Sign in Subscribe
Newspaper publishing

Copper Prices Plummet Amid Weak US Employment Data

Strategic Insights

— 1 min read

Copper futures took a hit after the US government announced that August non-farm payrolls remained flat, with the unemployment rate stuck at 9.1%. The September contract for copper fell 6.20 cents, or 1.5%, to trade at $4.0805 a pound, touching a low of $4.0900 a pound, the lowest level in five days. The weak economic data sparked speculation that the Federal Reserve might take further action, including quantitative easing, to boost the economy.

Key Takeaways:

  • Copper futures for December delivery fell 6.05 cents, or 1.5%, to trade at $4.1000 a pound on the Comex division of the New York Mercantile Exchange.
  • The front month contract, for September delivery, was recently down 6.20 cents, or 1.5%, at $4.0805 a pound.
  • Copper prices are highly sensitive to economic data, as the red metal is used in a wide range of products, from consumer electronics to household plumbing.
  • The downbeat jobs data sparked fresh talk of more quantitative easing from the Federal Reserve.
  • Copper prices had rallied on the back of the Fed's previous liquidity injection, known as QE2, as hopes of stronger economic activity boosted demand.
  • Analysts expect copper prices to remain stable until the economic outlook becomes clearer.
  • Senior market strategists with MF Global and Kingsview Financial predict that copper prices will hold above $4 due to speculation about potential further economic stimulus from the Federal Reserve.

Statistics:

  • Copper futures for December delivery fell 6.05 cents (1.5%) to $4.1000 a pound.
  • The front month contract, for September delivery, was down 6.20 cents (1.5%) at $4.0805 a pound.
  • Non-farm payrolls remained flat in August, with the private sector adding only 17,000 new positions.
  • The unemployment rate remained stuck at 9.1%.
  • Copper prices touched a low of $4.0900 a pound, the lowest level in five days.

Sources:

  • Dow Jones Commodities News via Comtex
  • Dow Jones Newswires
  • Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; tatyana.shumsky@dowjones.com

Read more