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Copper Rallies on Bullish Goldman Sachs Report, Hits One-Week High

October 24, 2017 at 16:46 by Andrew Moran

Copper futures are rallying on Tuesday following a bullish report from Wall Street titan Goldman Sachs. The industrial metal is trading at its best level in a week, and some analysts say there is room for more gains.

December copper futures rose $0.01, or 0.30%, to $3.20 per pound at 16:33 GMT on Tuesday. Copper prices are trading at their best levels since October 17, and continue to trade above the crucial $3 mark.

The red metal is climbing higher following a new report from Goldman Sachs. The Wall Street financial institution raised its 12-month forecast by 15%, attributing the increase to Chinese demand and the rise of electric vehicle development.

According to Goldman analysts Hui Shan, Jeffrey Currie, Mikhail Sprogis, and Yubin Fu, China’s demand for copper is projected to jump 3.1% this year and 1.8% per year on average until 2022. Despite economic growth prognosticated to subside in the coming years, the research report notes that China will still account for half of global copper demand over the next five years.

We believe the current level of copper prices is largely justified by strong and synchronous global growth, the US Dollar depreciating and repeated disappointments in copper mine supply.

Other analysts are not as bullish. Julius Baer analyst Carsten Menke told Reuters that the copper market is presently “oversupplied.”

We see an oversupplied copper market next year partly driven by a slowdown in China on the property and infrastructure side, and we have mine production coming back after this year’s strikes.

Copper prices are also rising higher on a weaker US dollar as the greenback slipped 0.07%. A weaker US dollar is good for dollar-denominated commodities like gold, silver, and copper because it makes it cheaper for foreign investors to purchase. Copper had recently retreated from its three-year high amid a firmer greenback.

Other metals are in the red on Tuesday. December gold futures slipped $4.00, or 0.31%, to $1,276.90 an ounce. November silver futures slid $0.13, or 0.79%, to $17.03 per ounce. November platinum futures dipped $3.50, or 0.38%, to $923.70 an ounce. December palladium futures rose $9.05, or 0.95%, to $959.00 an ounce.

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