Futures Market News
Copper futures recover after sharp losses
Apr 05, 2012 03:21 PM
The price of copper futures on Thursday reversed three trading sessions of losses, published reports indicate.
The economy of the U.S., the globe's largest, continued showing signs of gaining momentum as it recovers from the Great Recession and avoids a double-dip recession, Bloomberg reports. The nation trails only China for consumption of the industrial metal, which is sensitive to economic and financial developments due to its myriad uses in construction, manufacturing and other industry.
The U.S. labor market is continuing its development while consumer confidence also is on the rise. The weekly report on the U.S. workforce penned by the Labor Department indicated applications for jobless claims last week dropped to its lowest number since 2008.
A consumer index administered by Bloomberg gained to its top level in four years amid prospects for career opportunities brightening.
"The outlook for copper is quite constructive," partner William O'Neill with Logic Advisors in New Jersey told the news service. "The U.S. is doing well, and China's economy may be better than people think."
At 1:52 p.m. on Thursday, copper futures climbed 0.16 percent, a 0.06 cent increase to $3.7965 per pound.
On Wednesday, the reddish metal endured its sharpest loss in three-and-a-half months as a consequence of the U.S. Federal Reserve minimizing the likelihood of implementing more monetary stimulus.
Thursday also saw China re-open its markets after three consecutive days of being closed for a holiday. The Asian nation is the globe's largest consumer of copper and its economic and financial dealings often impact the price of the industrial metal.
One analyst noted China is set to release data next week that will shed light as to whether the nation is planning additional rounds of intervention.
Next week's data from China "should provide information about the extent to which the Chinese central bank could implement further measures to loosen monetary policy," states a report penned by analyst Daniel Briesemann with Commerzbank in Frankfurt, according to Bloomberg.
Another analyst also credited the Asian nation re-opening its markets as being beneficial to the price of copper futures, according to Dow Jones Newswires.
"The return of the Chinese to the market overnight saw some small-scale and opportunistic buying emerge" in the market for copper, states a note penned by analyst Leon Westgate with Standard Bank.
The reddish metal's losses on Wednesday were as high as 3.3 percent, Dow Jones Newswires reports.
In addition to the U.S. Federal Reserve indicating no new intervention is likely any time soon, another factor that pulled down the reddish metal are troubles in Spain, a euro zone nation struggling under the duress of the sovereign debt crisis. That suggests the crisis to which officials have devoted large amounts of time, effort and money for resolution remains a viable threat.
Reuters reports the reddish metal was driving toward its top price of the year in anticipation of additional monetary easing in the U.S. But the minutes from the March 13 meeting of the Federal Open Market Committee of the U.S. Federal Reserve, which were released earlier this week, did their part to pull down prospects for the reddish metal.
Otherwise, the reddish metal was within 1 percent of prices higher than $8,700 per pound.
"Each time copper dips we see consumer hedging and some buying from investors. But as prices get to about $8,600, you're getting some of the small producers selling. Funds have no conviction either way, so it seems to be stuck in this range for now," analyst David Wilson with Citi told Reuters.
With the final day of the trading week being Good Friday, U.S. markets are closed.
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