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BASE METALS: US Employment Data Weigh On Comex Copper
Sep 5,2011 08:55CST
industry news
Copper futures slumped below $4.10 after U.S. August employment data delivered its worst reading in a year.

Sep 02, 2011 NEW YORK (Dow Jones)--Copper futures slumped below $4.10 after U.S. August employment data delivered its worst reading in a year.

Non-farm payrolls were unchanged last month as the government sector again shed jobs while the private businesses added only 17,000 new positions. Meanwhile, the unemployment rate was stuck at 9.1%.

Copper futures for December delivery, the most active contract, fell 6.05 cents, or 1.5%, to trade at $4.1000 a pound on the Comex division of the New York Mercantile Exchange. The contract touched a low of $4.0900 a pound, the lowest level in five days. 

The front month contract, for September delivery, was recently down 6.20 cents, or 1.5%, at $4.0805 a pound.

Copper prices are highly sensitive to economic data as the red metal is used in everything from iPods and cars to household plumbing and demand for such goods wanes when the economy falters.

The downbeat jobs data sparked fresh talk of more quantitative easing from the Federal Reserve. The central bank has said it is ready to help but avoided indicating specific policies, which left many market participants hoping the Fed's extended policy setting meeting in will yield a strategy. Copper futures had rallied on the back of the Fed's last liquidity injection, known as QE2, as hopes of stronger economic activity boosted demand.

"We will hold $4 just because people are asking if there's a QE3 coming after this unemployment number," said Bob Haberkorn, a senior market strategist with MF Global. "The Fed did leave that door open."

Copper prices had briefly slipped below $4 amid a steep market-wide sell-off in early August, as concerns about sovereign debt in Europe and the U.S. triggered fears of a global recession.

But while those fears have largely been accounted for, few market participants see a strong case for copper marshalling another challenge to this year's record highs.

"I think you're going to see copper go sideways for the foreseeable future until people see how the economy is going to pan out," said Matt Zeman, head of trading at Kingsview Financial.


copper futures

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