Demand for the base metal is believed to be on its way up and data about stronger home sales in the U.S. in August is one key indicator. The U.S. is the globe's second largest consumer of the reddish metal.
China, the world's top user, consumed the most copper since the end of 2013 this past June, according to data released by the International Copper Study Group.
"We're seeing copper getting a bit of a bounce off of the new-home sales numbers," strategist Matt Zeman with Kingsview Financial in Chicago told the news source on Wednesday. "People have been worried whether housing sales would go down with rising interest rates, and any sign that demand is holding up is a positive for copper."
At 12:20 p.m. on Wednesday, copper futures edged up 0.54 percent, a 0.0175-cent lift to $3.274 per pound.
Advance arrives after sharp losses
Wednesday gains come after the industrial metal fell 2.7 percent during the three past trade sessions. But since June, copper futures have climbed more than 7 percent as the base metal pushes toward its first quarterly advance in 12 months.
In 20 U.S. cities, prices of homes rose the most in at least seven years during the one-year period leading to this past July, according to a private-sector reports issued on Tuesday.
But one analyst told the publication that a rough road lays ahead for the reddish metal.
"When you look at the micro fundamentals for copper, there is more to worry about," analyst Gayle Berry with Barclays Plc in London told the news source on Wednesday. "You are looking at a market moving into surplus toward the end of the year."
Climb tempered by U.S. political strife
Reuters reports the ongoing imbroglio in the U.S. regarding negotiations about the budget was curbing the advance of copper futures.
Political leaders on Capitol Hill are conducting negotiations so as to avoid a government shutdown, yet they are not encountering large measures of success.
The challenges with the U.S. budget come after the U.S. Federal Reserve last week opted against slashing monetary stimulus following two days of policy meetings. On Wednesday of last week, chairman Ben Bernanke said economic stimulus would remain unchanged out of concerns for a sudden tightening of policy that would shake up markets.
The U.S. will continue to monitor economic data to gauge whether tapering stimulus measures is a wise idea.
Yet demand for the base metal remains strong for the nation that consumes an estimated 40 percent of the globe's supply.
China is bouncing back from rough economic times and the Asian nation's demand is humming, of commodities researcher told Reuters.
"Destocking in China has ended and the economy is picking up, there's no doubt about that at all," commodities research head Nic Brown with Natixis told Reuters on Wednesday. "We are still in a market that's in deficit. In 2014 there's more supply coming on stream so eventually there will be downward pressure on copper, but before that there's every prospect the market gets squeezed aggressively."
Labor strike at Peruvian unlikely to impact production, company states
Production of the reddish metal at a South American mine is not forecast to suffer during a labor strike, MarketWatch reports the company said.
The Southern Copper Corporation in Peru has laid plans to implement an emergency plan. The company was informed on Tuesday that a 48-hour strike is set to ensue beginning on Thursday.
With operations in Peru and Mexico, the company is planning to invest more than $7 billion in ongoing interests in those two nations.
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 TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.