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Copper Prices Cool down After Freakish Spike

May 2, 2017 at 16:59 by Andrew Moran

Copper futures have cooled down following a freakish spike on Monday that analysts still cannot explain. Copper prices are down more than 1% as the industrial metal hovers around a one-month high.

July copper futures tumbled $0.028, or 1.05%, to $2.632 per pound at 16:37 GMT on Tuesday. Copper prices are trading at their highest levels since the beginning of April. Year-to-date, copper is up 4%.

The red metal had spiked nearly 3% during the Monday morning trading session. This left analysts baffled, and they still are unable to determine what exactly caused the sudden increase. What can be concluded is that this helped copper, especially at a time when it has traded relatively flat.

Investors have noted that there was a strike scheduled on Monday in Indonesia at the Grasberg mine. Thousands of workers had staged a rally to protest planned layoffs at the world’s second-largest mine.

Some experts believe that a low trade volume may have played a significant role. London and Shanghai, two key copper trading markets, were closed on Monday for a holiday.

Moreover, the US dollar has been rather weak for much of 2017, though it did surge 0.05% on Monday. A lackluster greenback is good for dollar-denominated commodities like gold, silver, and copper because it makes it cheaper for foreign investors to purchase.

Copper investors have been paying close attention to US President Donald Trump’s proposed $1 trillion infrastructure spending initiative. Despite growing skepticism that the president’s plan was all talk, Transportation Secretary Elaine Chao confirmed that the administration will debut the plan this summer. It remains unclear as to what some of the details may be, but this would be a boon for demand since infrastructure projects require copper.

Precious metals are flat. June gold futures rose $0.70, or 0.06%, to $1,256.70 per ounce. July silver futures are up $0.003, or 0.02%, to $16.845 an ounce.

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

One Response to “Copper Prices Cool down After Freakish Spike”

  1. Anantray

    Sir, good conclusion, but depressed price is still a clue !

    [Reply]

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