Aug 25, 2011 NEW YORK (Dow Jones)--Copper futures pushed to two-week highs Thursday on opportunistic buying ahead of Friday's speech by Federal Reserve Chairman Ben Bernanke, and as traders bet that demand for the metal wouldn't be upset by signs of an economic slowdown.
The most actively traded copper contract, for September delivery, recently traded up 9.35 cents, or 2.3%, at $4.0915 a pound on the Comex division of the New York Mercantile Exchange. Futures rose as high as $4.104 a pound, the highest intraday price since Aug. 8.
"Traders are beginning to feel a little bit better about where the economy stands," said Rob Kurzatkowski, senior commodity analyst with optionsXpress. "Even if we're having slow growth, it's better than a double-dip recession."
Copper futures fell from near $4.50 a pound to below $3.90 earlier this month as signs of stumbling growth rattled global markets and hit the demand outlook for the metal. But futures in recent weeks have found support near the $4 mark as equities markets have stabilized and traders bet that copper demand won't slip as much as was feared.
The metal is sensitive to the economic growth outlook because of its widespread uses in construction and industry, and copper can track equities markets as proxies for the economic outlook when there is little in the way of copper-specific news.
Traders are also looking ahead to Bernanke's scheduled speech Friday at the Fed's annual retreat in Wyoming.
Some market participants are hoping Bernanke will hint at further support for the struggling U.S. economy, though Fed watchers say the chances of such an announcement are slim. That hasn't been enough to stop a trickle of speculative buying this week in assets such as stocks and commodities, however.
"We are unsure as to how markets will react to Chairman Bernanke's speech should he fail to provide the extra stimulus that the markets may be looking for," MF Global analyst Edward Meir said in a note. "The tempting conclusion is to suggest a sell-off would ensue ... but the markets could easily rally as well, as investors may interpret a more measured approach as a signal that the Fed believes the economy is capable of recovering on its own."