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Copper Erases Gains, Bounce is Probable

January 24, 2013 at 22:35 by Vladimir Vyun

Copper fell today, erasing its previous rally. Still, fundamentals look good for the industrial metal and many market analysts believe that copper may yet resume its rally.

China’s Purchasing Managers’ Index rose from 51.5 in December to 51.9 in January, according the preliminary estimate. The US leading index increased 0.5 percent in December, beating forecasts. Most macroeconomic reports from Europe were also good.

All in all, the fundamental data suggested that the global economy continues to grow. And that creates a favorable trading environment for copper as economic growth means rising demand for the industrial metal.

Not everything looked fine though and that perhaps caused the decline of the metal. Spain’s unemployment climbed to the record 26 percent, reminding about the problems of the eurozone. Additionally, specialists now believe that Great Britain’s economy returned back into recession.

March futures for delivery of copper dropped $0.012 (0.33 percent) to $3.6725 per pound as of 22:29 GMT on COMEX today. Contract for delivery of copper in three months declined $30 (0.37 percent) to $8,103 per metric ton on LME.

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