Markets

Copper Prices Post Gains

Hopes of a coordinated European bailout plan propelled copper futures to end sharply higher Tuesday, with December delivery reaching 15.65 US cents, or 4.5 per cent, to $US3.4395 per pound on the Comex division of the New York Mercantile Exchange.

Initial data from Thomson Reuters showed copper volumes persisted at advanced levels through last week's selloff and Tuesday's bounce. In New York, close to 72,000 lots were traded, which is more than 50 percent above the 30-day average.

Copper, along with gold and silver, and even crude oil, took a beating in recent weeks due to heightened fears of another global recession. The past weeks saw investors liquidating their assets to turn more into the heightened U.S. dollar that time.

But analysts said buying confidence had regained on Monday when investors saw the European Union and the IMF authorities zealously working to strengthen the region's bailout fund.

Of all commodities, copper is the most sensitive to growth outlook largely due to its extensive use in construction and manufacturing. Copper investors, traders and analysts have been closely monitoring developments in the euro zone, as a member state's default could immediately trigger a fiscal calamity that would imperil both industrial and financial markets.

London Metal Exchange three-month copper was up $US328, or 4.5 per cent, settling at $US7,594 per ton, up from the prior day's 14-month trough at $US6,800.

A weakened U.S. dollar also contributed to copper's Tuesday record, as a weak dollar pushes investors to buy more of dollar-based commodities.

Copper's flipside association with the dollar is at its greatest since May last year.

Meanwhile, latest data on the demand side showed that copper stocks at LME-authorized warehouses jumped 3,825 tons to 467,400 tons.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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