Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Copper Futures Tumble in Seesaw Trading Day

February 6, 2018 at 17:37 by Andrew Moran

Copper futures tumbled as much as 1% on Tuesday, which saw indexes seesaw throughout the trading session. The industrial metal took a hit as investors sought refuge in the US dollar, but analysts say this serves as a tremendous buying opportunity in copper.

March copper futures slipped $0.029, or 0.90%, to $3.192 per pound at 16:22 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The red metal has been unable to match 2017’s meteoric start to the year as copper is down 3% year-to-date.

The industrial metal slid amid a rising US dollar as the greenback rose above the important 90.0 mark. A stronger greenback is bad for dollar-denominated commodities like copper because it makes it more expensive for foreign investors to purchase.

Despite the strong dip in copper futures, analysts say this presents a terrific buying opportunity for investors. With global manufacturing gaining momentum and current supply shortfalls, Citibank suggests in a new report that traders may be rotating into industrial metals during market turmoil.

The recent sell-off in rates and equities, and a spike in VIX (a volatility index) present an opportunity to rotate into industrial metals.

We recommend asset managers raise their exposure to industrial metals over the coming month, particularly at the expense of bonds and other fixed income, consistent with… our own constructive 1H18 outlook for industrial metals – most notably towards zinc and copper.

According to Reuters, mining companies working in the Democratic Republic of Congo are warning about a new mining code that could diminish investment in the fledgling nation. Mining operators are cooperating to prevent the proposal from being enacted.

Other metals are in the red on Tuesday. April gold futures tumbled $4.90, or 0.37%, to $1,331.60 per ounce. March silver futures were down $0.03, or 0.19, to $16.64 an ounce. April platinum futures dipped $1.30, or 0.13%, to $994.10 an ounce. April palladium futures crashed $28.30, or 2.74%, to $1,004.65 per ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply