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Copper Jumps 1% on Stronger Chinese Housing Market, Lower US Dollar

November 21, 2017 at 17:47 by Andrew Moran

Copper futures have surged more than 1% on Tuesday after new data found strong support in China’s housing market. The industrial metal further rose from a slumping US dollar.

December copper futures rose $0.0325, or 1.05%, to $3.125 per pound at 16:34 GMT on Tuesday on the Comex division of the New York Mercantile Exchange.

Despite a brief hiccup at the end of October, the red metal has been climbing over the last three months, spurred by stronger Chinese demand and bullish sentiment among investors. Year-to-date, copper prices have advanced 23%.

According to Reuters, prices for new homes in China increased, rising at a faster pace in October compared to the previous month. Analysts note that the Chinese housing market is facing stronger fundamentals, which is great for commodities like copper.

Experts are warning investors that higher home prices in the world’s second-largest economy does not necessarily mean new construction will commence. With China instituting strict credit controls and restrictions, it is becoming a lot more difficult to build residential and commercial properties in a market that many agree was in a bubble.

Copper prices were given another boost on Tuesday from a lower US dollar as the greenback slipped 0.10%. A weaker US dollar is good for dollar-denominated commodities like copper because it makes it cheaper for foreign investors to purchase.

It appears that traders are selling copper and taking profits now. According to the latest data from the US Commodities Futures Trading Commission (CFTC), hedge funds and money managers reduced their net long positions in copper futures to their lowest levels since July.

Other metals are trading in positive territory on Tuesday. December gold futures jumped $7.39, or 0.58%, to $1,282.70 an ounce. December silver futures rallied $0.15, or 0.91%, to $16.99 per ounce. January platinum futures surged $12.50, or 1.35%, to $936.10 per ounce. December palladium futures declined $12.05, or 1.22%, to $998.15 an ounce.

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