Commodity Blog

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


Copper Plunges as US Dollar Surges on Jerome Powell Testimony

February 27, 2018 at 17:51 by Andrew Moran

Copper futures plunged nearly 2% on Tuesday as the US dollar surged amid Federal Reserve Chair Jerome Powell’s testimony on Capitol Hill. All of the other metal commodities are deep in the red, too.

March copper futures slipped $0.05, or 1.56%, to $3.1475 per pound at 16:34 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The industrial metal tanked soon after the US central bank head’s written testimony was released, but copper prices are gradually paring those losses.

Year-to-date, the red metal has declined nearly 5%.

Speaking the House Financial Services Committee, Powell hinted that policymakers will continue to raise interest rates despite recent market volatility. He told lawmakers in prepared remarks:

Despite the recent volatility, financial conditions remain accommodative. Some of the headwinds the US economy faced in previous years have turned into tailwinds: In particular, fiscal policy has become more stimulative and foreign demand for US exports is on a firmer trajectory.

The statement prompted yields to spike: the 10-year Treasury note yield soared more than 2% to 2.907%. This enabled the US dollar to strengthen as the greenback advanced 0.53%. A stronger buck is bad for dollar-denominated commodities like copper because it makes it more expensive for foreign investors to purchase. After a bad start to 2018, the US dollar is up more than 1% this month.

Powell will next take questions from the Senate Banking Committee on Thursday.

With a more hawkish Fed, the market is beginning to pencil in at least four rate hikes in 2018.

Other metals were bleeding red ink. April gold futures shed $16.10, or 1.21%, to $1,316.70 per ounce. May silver futures tumbled $0.23, or 1.43%, to $16.38 an ounce. April platinum futures dropped $16.00, or 1.67%, to $985.80 an ounce. April palladium futures slid $21.05, or 2.00%, to $1,033.40 per ounce.

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

Leave a Reply