Copper is up Wednesday, with analysts pointing to market activity in China as the most probable cause. Binary Tribune reported that copper contracts for December, which are the most-traded contract in New York, stood at $3.0315 per pound, up 0.80 percent for the day, though it also logged the lowest price in five months at $3.
The HSBC and the Chinese government reported factory growth in China. The growth, however, was so minimal according to HSBC that copper was forced to the downside. The Tribune noted that the factory sector is one of the leading indicators of copper demand and China accounts for about 40 percent of copper demand in the world.
“The mood here is pretty bearish. It looks like people are expecting this market to trend down to its March lows, below $3 a pound,” said Bob Haberkorn, a broker at RJO Futures.
In addition to halting growth in China’s factory sector and economy as a whole, NASDAQ reported that the strong U.S. dollar may also be keeping copper down, as it generally lessens the appeal of dollar denominated commodities because it makes them more expensive to hold.
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.