Copper Prices Plummet Amid Weak US Employment Data

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