The price of copper rose to the highest level in 27 months on Monday, as commodity brokers speculated that both quantitative easing from the Federal Reserve and falling inventories of the red metal will make it pricier.
Interestingly, the dollar climbed against a basket of currencies today, beating the Canadian dollar, Brazilian real, Japanese yen, British pound and the euro.
But copper gained on top of the U.S. currency, rising 1.5 cents to close at $3.7895 per pound on the Comex in New York. During the day's trading, the price hit $3.82 per pound, which is the highest level the metal has seen since 2008.
"Prices are up on economic optimism," Adam Klopfenstein, a senior market strategist at a broker in Chicago, told Bloomberg News. "Copper is looking beautiful to the upside."
Copper plays an interesting role in international commodities markets, because it can gain on both falling currencies and on prospects for economic growth. Since it is so important in manufacturing and electronics, it's particularly sensitive to indicators of gross domestic product growth.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
