BASE METALS: Copper Rebound Fizzles; Futures Hit 7-Week Low
15 Dezember 2011 - 8:48PM
Dow Jones News
Copper futures edged lower Thursday, settling at the lowest
price in seven weeks as investors continued to cash out of
commodities on the view that Europe's financial turmoil would curb
demand for raw materials.
Copper had traded higher earlier in the day, as a rebound in the
euro eased the pressure on dollar-denominated futures and other
investors saw a bargain in the market a day after futures stumbled
by nearly 5%. But those gains faded after the dollar recovered from
its early lows.
The most actively traded copper contract, for March delivery,
fell 1.15 cents, or 0.4%, to settle at $3.2670 pound on the Comex
division of the New York Mercantile Exchange, the lowest settlement
price since Oct. 21.
Futures tumbled Wednesday, as the euro's drop below the key
$1.30 level and rising Italian borrowing costs spooked investors
and spurred a flight from commodities. Gold crashed through the
$1,600 mark and settled at a five-month low, and Nymex crude oil
sank by more than 5%.
Markets were calmer Thursday after a successful Spanish bond
auction and some better-than-expected economic data, but investors
remained cautious toward raw materials.
Europe "is still standing," Kitco Metals analyst Jon Nadler said
in a note. "But its woes are making many a trader seek total
safety, even at the expense of any returns."
Copper's fall Thursday came as readings on manufacturing
activity in China and the euro zone showed the sectors continued to
contract in December, albeit at a slower pace than in November.
In the U.S., the number of workers filing new applications for
unemployment benefits fell to the lowest level since May 2008, a
sign that the long-struggling U.S. labor market was improving.
Copper is sensitive to the economic outlook because of its
widespread uses in construction and manufacturing. Prices have
generally tracked investor sentiment toward Europe's debt crisis in
recent weeks, as a credit crunch there could shackle the industrial
economy.
"Given the run of weakness across markets in recent days, prices
are looking oversold," said William Adams, head of research with
metals research service FastMarkets. "We would not be surprised to
see some rebounds, as long as the data and news flow are not too
bearish."
Copper settlements (ranges include electronic and pit trading):
Dec $3.2595; down 1.15 cents; Range $3.2530-$3.3100
March $3.2670; down 1.15 cents; Range $3.2325-$3.3300
-By Matt Day, Dow Jones Newswires; 212-416-4986;
matt.day@dowjones.com
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