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Copper Rebounds As Investors Wait for Chinese Data, Sliding Dollar

November 13, 2018 at 17:38 by Andrew Moran

Copper futures are rebounding on Tuesday after declining to kick off the trading week. The industrial is benefiting from the wait-and-see approach by investors pertaining to a series of Chinese economic reports scheduled for Wednesday. Copper prices are also getting a boost from a plunging greenback.

December copper futures surged $0.02, or 0.77%, to $2.69 per pound at 15:35 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper prices have cratered more than 3% over the past month, and they are down 20% year-to-date.

The US dollar plummeted 0.56% to 97.10, one of its worst daily performances this year. A weaker buck is good for dollar-pegged commodities because it makes it cheaper for foreign investors to purchase. The dollar, however, has rallied nearly 6% so far in 2018.

On Wednesday, China will release industrial output and retail sales data, which could provide clues on the economic health of the world’s biggest metals consumer. It has been projected that retail sales and industrial production improved in October, while property and automobile sales were flat.

But concerns over cooling economic growth in the world’s second-largest economy has been weighing on overall investor demand. Analysts warn that the red metal might not receive a significant boost in value until US-China trade tensions have subsided and a new trade agreement has been established. Considering the lack of progress, metal traders may need to wait until 2019 to see the major gains.

Meanwhile, investors will head to Shanghai this week for the annual Asia Copper Week event. A dark shadow is being cast over the festivities, and many attendees are bearish on the short-term outlook for the industrial metal.

A copper fabricator in southern China told Reuters: “Our expectations for next year are not too good either.”

In industry news, Santiago-based copper producer Codelco recorded lower output in the third quarter, as well as a 5% decline in the first nine months of 2018. Analysts say that this could tighten global supplies in the coming months.

In other metal commodities, December gold futures rose $0.20, or 0.02%, to $1,203.70 per ounce. December silver futures jumped $0.015, or 0.11%, to $14.025 an ounce. December platinum futures were flat at $845.40 an ounce. December palladium futures added $10.10, or 0.93%, to $1,095.70 per ounce.

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